Stock markets saw a slight recovery on Tuesday, as Asian and European indexes clawed back some of their recent heavy losses. Despite this bounce, a lingering sense of uncertainty and sluggish sentiment continued to weigh heavily on investor confidence, driving gold to another all-time high as anticipation mounts over President Donald Trump’s upcoming tariff announcement.
Investors are positioning themselves for what Trump has dubbed “Liberation Day,” which he plans to reveal on Wednesday. The President has threatened to impose tariffs on nearly all countries, claiming they have been “ripping off” Americans for years. The lack of clarity on the details of these tariffs, including who will be impacted and by how much, has sent shockwaves through the global markets, triggering fears of a potential recession and making equities vulnerable to wild swings.
On Monday, Trump added fuel to the fire with his warning of a possible 25% tariff on car imports, further dampening market sentiment. Governments around the world are bracing for retaliatory measures, as seen in Vietnam’s decision to reduce duties on certain goods, including cars and agricultural products.
Despite the turmoil, some analysts are holding out hope for a quick rebound. “Some on Wall Street are already talking about how ‘April 2’ could bring a lighter-than-expected tariff announcement, triggering a snap-back rally in risk assets,” said Jose Torres, senior economist at Interactive Brokers. However, others caution that the economy may not withstand such a major stress test, with rising household costs adding pressure to consumer spending.
Stock markets showed signs of life on Tuesday, with Tokyo, Hong Kong, Shanghai, Sydney, Seoul, Taipei, Bangkok, Singapore, and Wellington all making gains. London, Paris, and Frankfurt also saw positive openings. However, this rebound remains fragile. In New York, the S&P 500 ended its worst quarter since 2022 with a modest rally that barely masked the underlying uncertainty.
As investors flocked to safer investments, gold prices surged to a record high of $3,149, reflecting growing fears of further market volatility. The VIX, also known as the “fear index,” rose for the fourth consecutive day, adding to the sense of unease.
Michael Wan of MUFG warned that the markets, including Asian currencies, may not be fully pricing in the potential magnitude of Trump’s tariff actions. “We believe Trump could be more aggressive than many anticipate in pursuing a significant structural shift in the global order, beyond the daily uncertainty and policy whiplash,” he said.
Key Market Figures:
- Tokyo – Nikkei 225: 35,624.48 (flat)
- Hong Kong – Hang Seng Index: 23,266.32 (+0.6%)
- Shanghai – Composite: 3,348.44 (+0.4%)
- London – FTSE 100: 8,661.53 (+0.9%)
- Euro/Dollar: $1.0810 (down from $1.0817)
- Pound/Dollar: $1.2928 (up from $1.2916)
- Dollar/Yen: 149.99 yen (up from 149.94 yen)
- West Texas Intermediate: $71.72 (+0.3%)
- Brent Crude: $75.00 (+0.3%)
- New York – Dow: 42,001.76 (+1.0%)
As Trump’s tariff plans continue to stir up uncertainty, global markets remain on edge, with investors anxiously awaiting his next move. The volatility may continue for the foreseeable future, making it crucial for investors to stay alert and prepare for potential market turbulence.
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