United States
Another day of tariff-related announcements fuelled market volatility in the U.S. as the trade conflict between Canada and the U.S. continued. The session began with President Trump increasing tariffs on Canadian steel and aluminium to 50% in retaliation for Ontario’s electricity tariffs on U.S. exports. This development sent U.S. markets to session lows. Later in the day, reports emerged that Canada’s surcharges were being suspended, and President Trump suggested the tariff hike could be negotiated. However, after the market closed, the President said there would be no exemptions on tariffs but the White House trade adviser Navarro said the 50% tariff wouldn’t be imposed on Canada. These changing policy decisions continue to unsettle investors.
By the close of trading, major U.S. indexes were lower. The Dow Jones Industrial Average fell 478 points (-1.14%) to 41,433, while the Nasdaq Composite slipped 0.18% to 17,436.10. The S&P 500 dropped 0.75% (-42 points) to 5,572.07, having earlier been down as much as 1.5% before partially recovering. All sectors of the S&P 500 finished lower.
In geopolitical developments, Ukraine agreed to an immediate 30-day ceasefire brokered by the U.S., contingent on Russia’s agreement. The U.S. also announced it would resume military assistance to Ukraine and lift the temporary pause on intelligence sharing.
Stock movements were mixed. Some stocks that had been aggressively sold off in recent sessions rebounded. Tesla rose 3.8% (+$8.44) to $230.58, while Nvidia gained 1.67% to $108.76. Apple dropped 2.91% (-$6.63) to $220.84 following reports that the company is planning a major overhaul of its software, which will change the user interface and operating system of its consumer products. The changes are expected to simplify navigation and device control.
Delta Airlines fell 7.25% after issuing a profit warning, citing weaker travel demand due to growing economic concerns. In contrast, Southwest Airlines surged 8.34% after announcing that, for the first time, it will begin charging for checked bags and introduce a basic economy fare.
Bond yields jumped, with the 10-year Treasury yield rising 6 basis points to 4.27%, while the 2-year yield climbed by the same amount to 3.94%. Meanwhile, the U.S. dollar weakened to its lowest level since October 2024, losing 0.42% on the Bloomberg Dollar Index.
Note: U.S. market prices are closing prices as their clocks moved to daylight savings.
Europe
Concerns over tariffs continued to weigh on European stocks, leading to a fourth consecutive session of declines. The EuroStoxx 600 dropped 1.7%, losing 9.31 points to close at 536.89. President Trump announced plans to increase tariffs on Canadian steel and aluminum in retaliation for Ontario’s decision to impose a levy on electricity exported to the U.S. He also suggested that tariffs on automobiles could be raised.
This news pressured all sectors of the EuroStoxx 600 lower, with the exception of utilities. The steepest losses were seen in the healthcare sector. The UK market faced similar weakness, with the FTSE 100 falling 1.21% to 8,495.99.
Travel stocks also declined after U.S. airline Delta issued a profit warning, citing economic uncertainty as a factor in reduced consumer and business travel. As a result, ICA Group (owner of British Airways) fell 6.12%, while Lufthansa dropped 5.29%.
The threat of higher auto tariffs weighed on car manufacturers, with Volkswagen declining 1% and Stellantis losing 5.2%. Meanwhile, defence stocks rebounded from Monday’s losses, despite growing concerns over Germany’s plan to increase military spending. Opposition from the Green Party, which has put forward an alternative proposal, has raised fears of renewed political gridlock in the Bundestag, similar to last year.
On the economic front, a UK consumer survey indicated a slowdown in consumer spending in February, following a rebound in January.
In the bond market, yields rose, with Germany’s 10-year Bund yield climbing 6 basis points to 2.89%, while UK gilt yields increased by 3 basis points to 4.67%. Meanwhile, the euro extended its gains against the U.S. dollar, with EUR/USD reaching 1.0931—a five-month high.
Australia
The ASX200 pared early losses on Tuesday, closing 0.91% lower (-72 points) at 7,890.10 after an initial sharp drop led by steep declines in U.S. markets. At its lowest point, the index had fallen 1.8%, reaching a seven-month low. Eight of the eleven sectors ended lower, with technology and industrials among the hardest hit, while utilities and energy posted gains.
The global sell-off in technology stocks extended to Australian markets, with the sector dropping 3.95% in a broad-based decline. Xero fell 5.07% to $158.55, while TechnologyOne lost 5.68%. Wisetech, which has been under pressure for the past two months, performed relatively better, slipping 1.86% to close at $86.14. The weakness in tech stocks was also evident across Asian markets.
The healthcare sector declined 1.79%, though two stocks stood out. Pro Medicus plunged 10.45% to close at $229.19 as traders exited the high-momentum stock, which had significantly outperformed the market in recent months. In contrast, ResMed continued its recent rally, rising 2.96% to close at $37.52. Last week, the company’s CEO indicated that U.S. tariffs could benefit ResMed by making rival products from Mexico and Canada more expensive.
The banking sector rebounded from early session losses. Commonwealth Bank (CBA) ended 0.82% lower at $146.92 after falling as much as 2.5% earlier in the session. ANZ was the strongest performer among the big four banks, rising 1.04% to $29.02. However, sentiment around Macquarie remained negative, with reports suggesting the bank may struggle to meet earnings expectations. Macquarie shares fell 3.10% to $201.83.
Data centre operator Digico slumped 7.43%, dropping 30 cents to $3.74, following an initial neutral rating from broker Barrenjoey. The broker warned of potential risks that could weigh on the stock price. Digico is set to be added to the ASX200 index on March 24, according to S&P.
In more positive news, the Westpac Consumer Confidence Index showed a notable improvement, rising 4% to 95.9 in March, driven by easing inflation and expectations of interest rate cuts, pushing the indicator to a three-year high. However, the NAB Business Sentiment Index edged only slightly higher, with global economic uncertainty limiting gains.
Australian bond yields moved lower, with the 10-year yield dropping 6 basis points to 4.37%, while the 2-year yield fell 7 basis points to 3.73%.
The ASX 200 equity futures fell 75 points with a drop of 0.95%. In late news from the US, President trump announced there would be no exception for Australia on tariffs for steel and aluminium. The AUDUSD was slightly stronger at 0.6294.
Commodities
A weaker U.S. dollar and increased demand from investors seeking protection against market volatility drove gold prices higher on Tuesday. Gold gained US$32.37, or 1.12%, to settle at US$2,921.10. Silver also saw strong gains, jumping 2.60% to US$32.84.
Bitcoin rebounded as bargain hunters re-entered the market following its recent selloff, rising 5.1% to US$83,333.
Oil prices edged higher, supported by a weaker U.S. dollar, though trading remained cautious. Brent crude rose 0.79% (+US$0.54) to US$69.82, while West Texas Intermediate (WTI) crude added 0.70% to US$66.48. However, concerns over tariffs and their impact on demand remained at the forefront of traders’ minds. On the supply side, the U.S. Energy Information Administration (EIA) released a report on Tuesday projecting that crude oil and gas production in the U.S. will reach record highs in 2025.
Copper also advanced, gaining US$134 to US$9,662 per tonne, a 1.4% increase. The rally was driven by the weaker U.S. dollar, which outweighed concerns over lower demand from China, where producers have been scaling back output due to higher prices.
Iron ore continued its upward momentum, rising 2.3% to end at US$101.70 in New York. The commodity had advanced in the Asian time zone, and this continued during northern hemisphere trading.
Economic Calendar
Europe:
- ECB President Lagarde Speech – 7:45pm
US:
- Consumer Price Index (Feb) – 11:30pm
- Federal Budget Balance (Feb) – 5:00am
This article was written by Paul Darwell, Rivkin Securities Pty Ltd. Enquiries can be made via [email protected] or by phoning +612 8302 3632.
