Stocks waver on tariff concerns, gold hits new record high

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.”

Oil Advances

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:

• Fed Chair Jerome Powell gives semiannual testimony to Senate Banking Committee, Tuesday
• Fed’s Beth Hammack, John Williams, Michelle Bowman speak, Tuesday
• US CPI, Wednesday
• Fed Chair Jerome Powell testifies to House Financial Services panel, Wednesday
• Fed’s Raphael Bostic and Christopher Waller speak, Wednesday
• Eurozone industrial production, Thursday
• US initial jobless claims, PPI, Thursday
• Eurozone GDP, Friday
• US retail sales, industrial production, business inventories, Friday
• Fed’s Lorie Logan speaks, Friday

Some of the main moves in markets:

Stocks

• The Stoxx Europe 600 was little changed as of 8:44 a.m. London time
• S&P 500 futures fell 0.2%
• Nasdaq 100 futures fell 0.3%
• Futures on the Dow Jones Industrial Average fell 0.1%
• The MSCI Asia Pacific Index fell 0.4%
• The MSCI Emerging Markets Index fell 0.4%

Currencies

• The Bloomberg Dollar Spot Index was little changed
• The euro was little changed at $1.0314
• The Japanese yen rose 0.1% to 151.84 per dollar
• The offshore yuan was little changed at 7.3078 per dollar
• The British pound fell 0.1% to $1.2350

Cryptocurrencies

• Bitcoin rose 0.9% to $98,309.42
• Ether rose 2% to $2,719.06

Bonds

• The yield on 10-year Treasuries advanced one basis point to 4.51%
• Germany’s 10-year yield advanced three basis points to 2.39%
• Britain’s 10-year yield advanced two basis points to 4.47%

Commodities

• Brent crude rose 0.9% to $76.52 a barrel
• Spot gold rose 0.1% to $2,911.18 an ounce

This story was produced with the assistance of Bloomberg Automation.

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