United States
U.S. equity markets moved marginally higher in quiet trading on Tuesday as investors adopted a wait-and-see approach ahead of Wednesday’s expected announcement on new “retaliatory” tariffs. The potential severity and scope of these measures could spark significant market volatility, and global attention is now turning to how other countries may respond. Given the increases are highly anticipated any reactions from trade partners could be swift.
By the end of the session, the Nasdaq Composite rose 0.87% to close at 17,449, gaining 150 points. The S&P 500 advanced 0.38% to finish at 5,633.07, while the Dow Jones Industrial Average slipped slightly into negative territory, losing 11.8 points, or 0.03%, to end at 41,989.96. Of the S&P’s eleven sectors, nine ended the day higher, led by consumer discretionary stocks, while healthcare lagged. Market nervousness remained elevated, with the VIX volatility index holding firm at 21.95—well above its long-term average of 17.5—even after two days of gains in the S&P.
Consumer discretionary stocks outperformed, supported by gains in Nike and Tesla. Nike climbed 2.02% after bouncing off multi-year lows, while Tesla jumped 3.59% to $268.46 ahead of its first-quarter delivery numbers, expected on Wednesday. Analysts are forecasting around 377,000 units delivered for the quarter. Technology stocks also advanced, with Meta up 1.67% and Microsoft gaining 1.81% as investors rebalanced ahead of potential market turbulence. AI cloud provider CoreWeave surged 41.77% to US$52.57, rebounding strongly after a disappointing start to public trading.
Healthcare was the weakest sector, dragged down by Johnson & Johnson, which fell 7.59% to $153.25. The decline followed a U.S. judge’s decision to reject the company’s US$10 billion bankruptcy proposal, which was designed to resolve thousands of lawsuits related to claims that its talc products caused ovarian cancer. J&J stated that it would not appeal the ruling but also indicated it would not settle the remaining lawsuits.
In economic news, the latest JOLTS report showed a decline in job openings for February, with a slight increase in job losses. The ISM Manufacturing Index also pointed to continued contraction, falling to 49 for the month and recording a decline in new orders. Of greater concern to the Federal Reserve, however, was a rise in the index’s prices paid component, hinting at renewed inflationary pressures.
Bond yields retreated, with the 10-year Treasury yield dropping five basis points to 4.16%, and the 2-year yield falling four basis points to 3.87%.
Europe
European equities rebounded on Tuesday, reversing Monday’s losses, with the Euro Stoxx 600 climbing 1.07% to close at 539.64, up 5.72 points. The rally was broad-based, with all sectors advancing except energy. Technology and industrials led the gains.
In the UK, the FTSE 100 also posted solid gains, rising 0.61% to 8,634.80, an increase of 52 points.
The technology sector recovered from a four-month low, with software giant SAP gaining 2.35% and semiconductor maker ASML jumping 2.22%, supported by overall market optimism and broker upgrades.
Banks also rallied, with Commerzbank surging 7.39% and Barclays rising 2.12%. Aerospace and defence stocks performed strongly as well—Airbus rose 3.24% after reports the company delivered 70 aircraft last month, a sharp increase from the previous month. Engine manufacturer Rolls-Royce added 4.06%. AstraZeneca climbed 1% following promising results from a clinical trial targeting high cholesterol.
On the economic front, the Eurozone showed early signs of a pickup in activity. The March Manufacturing PMI was confirmed at 48.6, up from 47.6 in February. While still below the 50 mark that separates contraction from expansion, the improvement bolstered hopes that growth may return soon. Inflation in the Eurozone eased to 2.4%, down from 2.6% in the previous month and below economists’ expectations.
Bond yields declined, with Germany’s 10-year yield falling 5 basis points to 2.68% and the UK’s 10-year yield down 4 basis points to 4.63%. The euro weakened, with EUR/USD slipping 0.25% to 1.0788, as traders awaited Wednesday’s anticipated announcement on tariffs from the U.S., and any potential response from Europe.
Australia
The Australian equity market rallied strongly on Tuesday, with the ASX200 gaining 1.04% (+81.8 points) to close at 7,925.20. Investor sentiment was lifted by a stabilisation in U.S. markets, further buoyed by comments from Reserve Bank of Australia Governor Michelle Bullock following the central bank’s interest rate decision.
While the RBA held the cash rate steady at 4.10%, Governor Bullock’s statement that “monetary policy is well placed to respond to international developments if they were to have material implications for Australian activity and inflation” gave markets confidence that the RBA is prepared to act with rate cuts if needed to support the economy.
All sectors of the ASX200 closed higher, led by interest rate-sensitive areas. The real estate sector rose 2.11%, and utilities gained 1.91%. Goodman Group rebounded 2.67% to $29.19 after a string of declines, while Charter Hall surged 3.71% to $16.78. In utilities, Origin Energy climbed 2.66% to $10.81, and AGL advanced 1.81%.
The materials sector also posted strong gains following an encouraging economic signal from China. The Caixin China Manufacturing PMI rose to 51.2, its highest reading since November 2024, suggesting that recent stimulus measures may be gaining traction. This lifted iron ore prices by 1.4%, benefiting major miners: BHP rose 1.81% to $38.89, and Fortescue climbed 1.82% to $15.65.
Gold stocks also gained as the precious metal continued its upward trend. Evolution Mining rose 1.69% to $7.23, and Newmont added 1.06% to $77.93. However, Pilbara Minerals extended its decline, falling 5.64% to $1.59 following broker downgrades. The stock has dropped 20% over the past two weeks.
Energy stocks benefited from rising oil prices. The sector added 0.99% overall, with Woodside Energy up 1.69% to $23.51.
While the RBA did not consider a rate cut at this meeting, Governor Bullock expressed greater confidence that inflation is trending in the right direction. However, she also highlighted the risks posed by global trade tensions, noting that Australia is an open economy reliant on international trade. In a show of bipartisan unity, both Prime Minister Albanese and Opposition Leader Dutton stated that Australia would not retaliate with tariffs against the U.S., offering reassurance to markets.
Bond yields were little changed. The 10-year yield edged higher by 3 basis point to 4.41%, and the 2-year yield declined by 1 basis point to 3.66%.
Overnight the ASX200 futures moved higher with a 0.35% gain (+28 points). The AUDUSD also advanced adding 0.46% to be trading at 0.6276.
Commodities
Oil prices pulled back on Tuesday as supply concerns among traders eased. The absence of any concrete announcements from the White House regarding new sanctions or tariffs on Iran or Russia saw West Texas Intermediate (WTI) crude dip 0.31% to US$71.25, down 22 cents. Brent crude also edged lower, falling 29 cents (-0.39%) to US$74.46.
Earlier supply fears had been stoked by news that Venezuelan oil exports fell 11.5% in March due to existing sanctions and trade restrictions. However, this was offset by growing market expectations of potential demand destruction following U.S. President Trump’s upcoming announcement of “retaliatory” measures scheduled for Wednesday.
Gold prices consolidated following a strong recent rally, with traders adjusting positions. The metal slipped 0.21%, or US$6.75, to trade at US$3,117. Silver also declined, falling 1.27% to US$33.66. In contrast, Bitcoin rose 3% to trade at US$84,984, continuing its recent momentum.
Soft commodities reversed recent losses, climbing higher amid renewed concerns about supply disruptions. Coffee jumped 2.45% on ongoing supply worries, while cotton (+2.12%), soybeans (+1.77%), and sugar (+2.60%) also gained as traders anticipated fallout from potential tariffs and disruptions to established trade routes.
Iron ore prices rose following stronger-than-expected Chinese economic data. The Caixin China Manufacturing PMI climbed to 51.2—its highest level since November 2024—suggesting that recent stimulus measures are beginning to gain traction. Iron ore rose 1.6% (US$1.70) to US$103.00, with most of the gains occurring during the Asian session.
Meanwhile, copper eased slightly, down US$17 (-0.17%) to US$9,363 per tonne on the London Metal Exchange.
Economic Calendar:
AU:
- Building Permits (Feb) – 11:30am
US:
- ADP Employment Change (Mar) – 11.15pm
- Factory Orders (Feb) – 1:00am
This article was written by Paul Darwell, Rivkin Securities Pty Ltd. Enquiries can be made via [email protected] or by phoning +612 8302 3632.
