Markets Hit by New Tariff Threat – Nasdaq Down 1.2%
Global markets were hit again yesterday as President Trump advised that tariffs will go ahead against Mexico and Canada in early March. Tech stocks led the way lower on the U.S. indices; the Nasdaq dropped 1.21%, followed by the S&P which fell 0.50%, whilst the Dow managed a 0.08% gain. U.S. Treasury yields drifted lower, with the two-year down 0.8 of a basis point to 4.166% and the ten-year down 1.6 basis points to 4.385%. The dollar was quiet on the index, with the DXY up just 0.06% to 106.77, although it made strong ground against the CAD and MXN. Oil prices pushed slightly higher off recent lows, with Brent up 0.21% to $74.78 and WTI up 0.47% to $70.81 a barrel, whilst gold pushed higher again, reaching $2,948.79 by the close.
Gold Pivotal at These Levels
Gold remains trading near all-time highs at the moment, and investors and traders alike feel that the next few weeks could be pivotal for the long-term trend of the world’s favourite precious metal. Gold’s relentless move higher over the last year has seen it climb 48% above its low in February 2024 and over 13% in 2025 alone. These moves have taken place during periods of both dollar strength and weakness, which has taken the traditional U.S. dollar side of the trade out of the equation; however, some traders are now looking back to basics and feel that this side of the trade could reassert itself. Bulls point to a recent spate of poor data from the U.S. that could push the dollar lower, alongside lower Treasury yields and increased expectations of Fed rate cuts, and believe that a $3,000 print is not out of the question in the coming months.
Conversely, some bears are beginning to emerge, feeling that this move may be overdone and that a change in market sentiment could alter last year’s dynamics, potentially leading to significant corrections. Most market players agree, however, that gold will be trading at a very different level in a few months’ time.
Traders Eye Up the First U.S. Data of the Week Today
The macroeconomic calendar is once again relatively quiet for the first couple of trading sessions today; however, that is set to change when we receive the first tier 1 U.S. data releases in the coming days. There is nothing on the dance card for traders in Asia today, and while we will hear from Buba President Joachim Nagel in the European session, most traders are focusing on the New York session for market-moving updates. First up, we have the S&P Composite HPI number early in the day, with the market expecting it to print at 4.3%. Later in the session, we have the CB Consumer Sentiment data, which will probably have the most impact on the market, especially if it prints at the expected 103.3 figure. The Richmond Manufacturing Index data is also due out at the same time, but that figure is expected to be overshadowed by the Consumer Sentiment data. Later in the day, we will also hear from FOMC members Michael Barr and Thomas Barkin.
