Morning Wrap: ASX set to fall again after US recession fears grip markets, Dow and S&P500 suffer worst session in 2025

In a nutshell:

• ASX to take another hit after US markets suffer worst session of 2025

• Markets roiled after Trump does not rule out a recession 

• VIX spikes almost 20%, gold and oil weaker

Let's dive in.

S&P 500 SESSION CHART

S&P 500 never traded in positive territory but finished off worst levels (Source: TradingView)

OVERNIGHT MARKETS

• Major US benchmarks were sharply lower overnight, as stocks finished just a bit off worst levels. 

• S&P 500 and Nasdaq both posted worst YTD performance (Nasdaq worst since Sep-22). 

• Stocks saw a classic defensive rotation.

• In a Sunday interview on Fox News, President Trump declined to say whether a US recession is in the cards but did see a "period of transition" ahead for the economy

• Trump voiced optimism about the economy's longer-run prospects and argued focus needs to remain on the future and not on quarterly market performance.

• Strategists offer cautious outlook on S&P 500, citing economic, earnings growth risks (Bloomberg)

STOCKS

• Tesla struggling in China and BYD's ascent is largely to blame (Bloomberg)

• Trump says four groups interested in TikTok deal (Bloomberg)

• Ford to inject up to $4.76B into German business (FT )

• TSM revenue climbs 39% in the first two months on upbeat note for AI (Bloomberg )

CENTRAL BANKS

• ECB's Schnabel warns of persistent inflation risks, signalling potential rate cut pause (Bloomberg)

GEOPOLITICS & TRADE

• Trump accepts possibility of recession, rejects business fears over tariffs (FT)

• Lutnick expects 25% steel and aluminum tariffs to take effect Wednesday (NBC)

• China's tariffs on US farm products set to take effect Monday (NY Times)

• Steel and aluminum companies welcome help from Trump's tariff policies (NY Times)

• Trump says US close to lifting pause on intel sharing with Ukraine (Reuters)

• US and Ukraine officials meet in bid to progress minerals deal, ceasefire (FT)

• EU maintains trust in US ties amid geopolitical shifts, boosts defense capabilities (Bloomberg)

ECONOMY

• China's deflationary pressures deepen in February; analysts urge more policy stimulus (Reuters)

• China housing minister says confidence improving in property sector (Reuters)

• Japan's service-sector sentiment worsened in February for the second straight month on rising cost of living (Reuters)

• German industrial output rises in January, signaling easing downturn (Bloomberg)

ASX TODAY

• Star Entertainment Group negotiating with Salter Brothers in regards to refinancing package - Australian Financial Review

• Brookfield considering selling Healthscope - The Australian

• 4DMedical secures 3-year contract extension with Cleveland Clinic for functional lung imaging software 

WHAT TO WATCH TODAY

• Next support level on ASX 200 - around 7900 - likely to be tested today

• Literally nowhere to hide, with commodities taking a hit overnight as well

• US equities saw a defensive rotation, local defensives likely to be the best of a bad bunch, with growth stocks set to be hit hardest

BROKER MOVES

• SEEK upgraded to Neutral from Sell at Goldman Sachs; target up to $25 from $24

Key events 

Stocks trading ex-dividend: 

• Tuesday 11 March: Coronado Global Resources (CRN) – $0.006, Cue Energy Resources (CUE) – $0.01, Dusk Group (DSK) – $0.10, Echelon Resources (ECH) – $0.013, Helloworld Travel (HLO) – $0.08, Ive Group (IGL) – $0.095, News Corporation (NWS) – $0.112, News Corporation (NWSLV) – $0.112, Qualitas (QAL) – $0.025, Qantas Airways (QAN) – $0.264.

• Wednesday 12 March – Brambles (BXB) – $0.303, Breville Group (BRG) – $0.18, Kip McGrath Education Centres (KME) – $0.005, Motorcycle Holdings (MTO) – $0.08, Perpetual Equity Investment Company (PIC) – $0.04, WCM Global Growth (WQG) – $0.019.

• Thursday 13 March – Bapcor (BAP) – $0.08, Bisalloy Steel Group (BIS) – $0.08, Count (CUP) – $0.018, Duratec (DUR) – $0.018, Embelton (EMB) – $0.15, Glennon Small Companies (GC1) – $0.01, Glennon Small Companies (GC1PA) – $0.34, Globe International (GLB) – $0.10, Inghams Group (ING) – $0.11, Joyce Corporation (JYC) – $0.105, Kogan.com (KGN) – $0.07, McMillan Shakespeare (MMS) – $0.71, Perpetual (PPT) – $0.61, Pepper Money (PPM) – $0.071, PM Capital Global Opportunities Fund (PGF) – $0.055, PWR Holdings (PWH) – $0.02, Regis Healthcare (REG) – $0.081, SRG Global (SRG) – $0.025, Summerset Group (SNZ) – $0.101, Thorney Opportunities (TOP) – $0.011, Vulcan Steel (VSL) – $0.02, Yancoal Australia (YAL) – $0.52.

Other ASX corporate actions today:

• Dividends paid: FSA Group (FSA), Domain  Holdings (DHG)

• Listing: None

• Earnings: None

• AGMs: None

Economic calendar (AEDT):

Australia - Westpac Consumer Confidence, 10:30 AM, NAB Business Confidence 11:30 AM