United States
U.S. equities fell for a second consecutive session as conflicting statements from the U.S. administration on trade negotiations unsettled investors. Treasury Secretary Scott Bessent reiterated optimism that trade agreements were progressing, but later in the day, former President Trump downplayed the urgency, saying the U.S. didn’t “have to sign deals.”
By the close, all major indices were lower. The Dow Jones Industrial Average declined 0.95%, shedding 389 points to finish at 40,829. The Nasdaq Composite dropped 0.87% to 17,689, while the S&P 500 slipped 0.77% (43 points) to 5,606, with 9 of its 11 sectors in the red.
Healthcare was the weakest sector, falling 2.75%, amid dual concerns. President Trump is reportedly preparing to announce new pharmaceutical tariffs within two weeks, and the FDA appointed Vinay Prasad as director of its Center for Biologics Evaluation and Research. Prasad, known for his past criticism of the FDA and opposition to COVID vaccine mandates, sparked uncertainty. Eli Lilly tumbled 5.64%, while Moderna plunged 12.25%, closing at its lowest level since 2020.
Energy stocks rebounded with oil prices. ExxonMobil gained 1.39%, and Occidental Petroleum rose 1.21%. In the renewables space, Constellation Energy surged 10.29% after beating Q1 earnings expectations and announcing progress on a long-term nuclear power deal.
Tesla slid 1.75% to USD 275.35 following weak EV sales data from the UK, adding to investor concerns. Meta Platforms also declined, down 2% to USD 587.31.
On the economic front, the U.S. trade deficit widened in March, as businesses rushed to import goods ahead of potential tariffs, with Vietnam and Mexico seeing the largest increases. The composite Purchasing Managers’ Index (PMI) slipped to 50.6, below expectations of 51.2, though still indicating expansion.
Bond yields eased, with the 10-year Treasury yield falling 5 basis points to 4.29%, and the 2-year yield also down 5 bps to 3.78%. The U.S. dollar weakened further, with the Bloomberg Dollar Index down 0.30%.
Markets now await the outcome of Wednesday’s FOMC meeting. While rates are expected to remain unchanged, investors are focused on the Fed’s commentary for signals on the economic outlook and future policy direction.
Europe
European shares rebounded after an early selloff sparked by the German Bundestag’s failure to elect conservative leader Friedrich Merz as Chancellor in its first vote. However, following a successful second vote, Merz was confirmed as Chancellor, prompting a recovery in equity markets.
The pan-European Euro Stoxx 600 index ended the session with a marginal decline of 0.18%, closing at 536.35. Sector performance was mixed, with five sectors finishing higher and six lower. In Germany, the DAX initially dropped 2% following the failed vote but recovered to close lower by 0.41%. Meanwhile, UK markets resumed after a public holiday, with the FTSE 100 essentially flat, rising just 1 point to 8,597.
Healthcare was the weakest sector in the Euro Stoxx, falling 1%, driven by a 3.9% drop in Novo Nordisk shares ahead of its earnings report. The sector was also weighed down by concerns over potential U.S. tariffs on pharmaceuticals, following comments from former President Trump suggesting tariffs could be announced within two weeks.
Energy stocks advanced as oil prices bounced back, with the sector gaining 0.78%. British Petroleum shares rose 1.4% on speculation that Shell is considering an acquisition. A rally in gold prices, which climbed back above USD 3,400 per ounce, boosted demand for precious metals miners.
On the economic front, PMI data pointed to modest expansion. The HCOB Composite Purchasing Managers’ Index rose to 50.4 in April, up from 50.1 in March. Meanwhile, Producer Price Inflation (PPI) fell by 1.6% month-on-month, offering further signs of easing inflationary pressure.
In fixed income, German Bund yields rose 2 basis points to 2.53%. Yields had spiked following the initial failed vote but retreated after the second-round confirmation. In the UK, the 10-year gilt yield remained unchanged at 4.51%.
Australia
The Australian equity market edged lower on Tuesday, slipping 6 points (-0.08%) to close at 8,151.40. Despite the overall decline, seven of the 11 sectors finished higher, led by gains in the energy sector as oil prices rebounded. Healthcare was the worst-performing sector, falling 1.86%.
Technology stocks delivered mixed results, though the sector was lifted by a sharp rise in NextDC shares, which surged 8.29% to $13.71. The company announced a 30% increase in contract utilisation, driven by new AI-related customers. This marks its largest-ever contract win and helped ease short-term demand concerns. In contrast, WiseTech Global fell 2.21% to $92.09 after cautioning that tariffs may pose a headwind for the remainder of 2025.
In the healthcare space, Sigma Healthcare delivered its first update since merging with Chemist Warehouse, noting that earnings growth was broadly in line with Chemist Warehouse’s first-half performance. Despite this, investors reacted negatively, sending the stock down 6.7% to $2.94. Telix Pharmaceuticals also declined, losing 3.84% to $28.04.
Among energy stocks, coal producers gained ground. Yancoal rose 3.81% to $4.90, and Whitehaven Coal added 1.41% to $5.05. Woodside Energy advanced 0.35% to $19.94 after announcing plans to sell an additional 20–30% stake in its Louisiana LNG facility, aiming to reduce its holding to 50% to manage risk and validate its acquisition cost.
Westpac continued to slide following its earnings release on Monday, falling 1.97% to $31.81. The other major banks also edged lower as investors await results from NAB and ANZ. Macquarie Group bucked the trend, rising $1.51 to $195.88. Meanwhile, Platinum Asset Management declined further to $0.625 after reporting another fall in assets under management.
On the economic front, household spending fell 0.3% in March, ending a five-month streak of gains. However, consumer confidence improved, according to a joint survey by ANZ Research and Roy Morgan. Building approvals dropped sharply, down 8.8% in March—well below expectations of a 1.5% decline. Australian bond yields rose, with the 10-year yield up 6 basis points to 4.33% and the 2-year yield rising 4 basis points to 3.38%.
Overnight futures trading on the ASX 200 suggests a soft start to today’s session, with the contract down 0.45%, or 37 points. Meanwhile, the Australian dollar continued its upward momentum, gaining 0.35% to trade at USD 0.6491.
Commodities
Oil prices rebounded sharply on Tuesday, supported by renewed tensions in the Middle East and signs of improving demand from China and Europe, which temporarily eased concerns around oversupply. West Texas Intermediate (WTI) crude surged 3.45%, or USD 1.96, to close at USD 59.09, while Brent crude climbed 3.12% to USD 62.11.
Stronger-than-expected consumer spending in China during the country’s May Day holidays fuelled optimism about rising demand. Additional buying came from traders positioning for a rebound after oil prices fell to four-year lows in recent days. As prices declined, several U.S. producers reportedly announced the closure of some oil rigs, potentially tightening future supply.
Gold continued its rally, jumping 2.61% or USD 87.03 to USD 3,421 as safe-haven demand increased amid escalating Middle East tensions, renewed tariff concerns, and caution ahead of the U.S. Federal Reserve’s interest rate policy decision on Wednesday. Silver also advanced, rising 2.17% to USD 33.19.
In digital assets, Bitcoin gained 0.58%, trading at USD 94,765.
Base metals saw broad gains, with COMEX copper rising 1.72% and iron ore climbing 2.2% to USD 98.60. Optimism around a potential U.S.–China trade agreement and stronger Chinese demand following the holiday period were cited as key drivers behind the rally.
Economic Calendar
AU:
- Westpac Consumer Confidence (May) – 10.30am
- NAB Business Confidence and Conditions (May) – 10.30am
US:
- Fed Interest Rate Decision – 4:00am
- Fed Press Conference -4:30am
- Consumer Credit (Mar) – 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.
