by John Viljoen and Richard Henderson
Stocks struggled as the latest tariff news spurred caution among traders who are also looking ahead to testimony from Federal Reserve Chair Jerome Powell and key US inflation data.
Europe’s Stoxx 600 index was steady, while contracts for the S&P 500 and the Nasdaq 100 declined and a gauge of Asian equities dropped. Gold touched a fresh record high, while an index of the dollar held gains from Monday after President Donald Trump ordered tariffs on US imports of steel and aluminum.
The moves underscore how investors are struggling to gauge the potential flow-on effects from Trump’s actions for global trade, corporate earnings and inflation. The European Union said Tuesday it will respond to any tariffs the US might impose on it, escalating a potential transatlantic trade dispute.
“The best approach in terms of asset allocation is to find assets that can protect you,” said Christian Mueller-Glissmann, head of asset allocation research for Goldman Sachs, on Bloomberg Television. “The big challenge is that this is going to be much more difficult from here because the tariffs are very specific.”
Treasury yields ticked higher. Elsewhere in currencies, the pound slipped. Catherine Mann, a voting member at the Bank of England who helps set interest rates, told the Financial Times that weak demand is beginning to outweigh inflation risk.
Trump on Monday set tariffs on steel and aluminum shipments from all countries, including major suppliers Mexico and Canada, effective March 12. The president earlier said he would announce reciprocal tariffs this week on countries that tax US imports.
Aside from the global trade picture, investors will also be focused on this week’s key inflation data and Federal Reserve Chair Jerome Powell’s testimony before Congress. Expected inflation rates over the next year and three years ahead were both unchanged in January at 3%, according to results of the New York Fed’s Survey of Consumer Expectations published Monday.
“Inflation data, Powell’s congressional testimony, and tariffs are poised to drive the market story,” said Chris Larkin at E*Trade from Morgan Stanley. “If the S&P 500 is going to break out of its two-month consolidation, it may need a respite from the types of negative surprises — like DeepSeek, tariffs, and consumer sentiment — that have tripped it up over the past few weeks.”
In Asian trading, the regional benchmark was weighed down by weakness in shares in Hong Kong and mainland China. Japanese markets were closed for a holiday Tuesday.
The whipsawing trade in Chinese equities follows a rally this year helped along by fresh demand for technology stocks that has lifted a gauge of Hong Kong tech companies around 17% this year.
“We have rallied a lot,” Jason Lui, head of APAC equity and derivative strategy, BNP Paribas SA, said on Bloomberg Television regarding Chinese stocks. The uplift from DeepSeek, a Chinese generative AI alternative, comes just weeks before next month’s National People’s Congress in China, where policy initiatives are typically disclosed, he said.
Oil advanced from near its lowest levels this year as shrinking Russian production eased concerns over a glut. Gold set a fresh peak above $2,940 an ounce, before retracing some of that advance.
Key events this week:
Some of the main moves in markets:
This story was produced with the assistance of Bloomberg Automation.
Copyright Bloomberg News
Canadian stocks are on a roll in 2025 as the country prepares to name a new Prime Minister.
Two C-level leaders reveal the new time-saving tools they've implemented and what advisors are doing with their newly freed-up hours.
The RIA led by Merrill Lynch veteran John Thiel is helping its advisors take part in the growing trend toward fee-based annuities.
Driven by robust transaction activity amid market turbulence and increased focus on billion-dollar plus targets, Echelon Partners expects another all-time high in 2025.
The looming threat of federal funding cuts to state and local governments has lawmakers weighing a levy that was phased out in 1981.
RIAs face rising regulatory pressure in 2025. Forward-looking firms are responding with embedded technology, not more paperwork.
As inheritances are set to reshape client portfolios and next-gen heirs demand digital-first experiences, firms are retooling their wealth tech stacks and succession models in real time.
