United States
US equity markets edged lower on Tuesday, with volatility subsiding amid continued announcements from the US administration regarding tariffs. The latest round of policy hints included potential tariffs on drug companies and semiconductor manufacturers, alongside possible exemptions for automakers. The result was narrower trading ranges and modest declines across major indices.
The Dow Jones Industrial Average fell 0.38%, losing 155 points to close at 40,368. The Nasdaq Composite slipped 0.05% (-8 points) to 16,823.17, while the S&P 500 declined 0.17%, down 9.34 points to finish at 5,396. Seven of the S&P’s 11 sectors ended the session lower, with consumer discretionary the weakest performer, falling 0.80%.
In the banking sector, strong earnings continued. Bank of America rose 3.60% after reporting higher net interest income, driven by lower rates on deposits and better yields on investments. Citigroup gained 1.76%, off session highs, after beating estimates thanks to robust results in its equity and fixed income trading divisions. The positive results lifted sentiment across the broader financial sector.
Technology stocks traded in a narrow range. Nvidia advanced 1.35% to $112.20. In news after-market Nvidia said it would take a $5.5 billion charge in its next quarterly result tied to exporting its chips to China, the stock was trading lower by 5.5% in early after-market trading. Meta declined 1.87% to $521.52 as its antitrust case continued to weigh on sentiment. The Wall Street Journal reported that CEO Mark Zuckerberg offered US$ 450 million to settle the case, while the Federal Trade Commission was reportedly seeking US$30 billion.
Boeing shares dropped 2.36% following a Bloomberg report stating that Chinese regulators have instructed domestic airlines to halt deliveries of Boeing aircraft—a potential escalation in the trade conflict. Meanwhile, United Airlines reported after the close, with shares trading up 5% in after-hours activity. The airline forecasted stronger-than-expected full-year earnings, citing sustained international travel demand, though it plans to cut domestic flights over the northern hemisphere summer due to softening demand.
In fixed income, bond markets stabilised. The 10-year Treasury yield fell 4 basis points to 4.33%, while the 2-year held steady at 3.84%. The US dollar rebounded from six-month lows, rising 0.35% on the Bloomberg Dollar Index.
Europe
European equities surged on renewed optimism that tariffs on automakers may be paused, coupled with encouraging corporate earnings. The Euro Stoxx 600 climbed 1.63%, gaining 8.17 points, with all sectors finishing higher except for consumer discretionary. Technology and financial stocks led the advance.
In the UK, the FTSE 100 also posted strong gains, rising 1.41% to close at 8,249.12.
The rally in the auto sector was driven by comments from President Trump suggesting he is considering temporary exemptions for car manufacturers. Stellantis jumped 6.46%, while BMW gained 2.16%. Auto parts suppliers also benefited, with tyre manufacturer Continental rising 2.41%.
Among individual stocks, Ericsson rose 7.3% after reporting better-than-expected first-quarter results, driven by increased demand for its 5G equipment. In contrast, luxury giant LVMH fell 7.8% following a weaker-than-expected report citing sluggish demand from both the US and China. The company also indicated it is exploring a shift of some production to the US. Other luxury names declined in sympathy.
Positive sentiment from strong US bank earnings spilled into European financials, lifting the sector by 2.66%. Banco Santander advanced 3.6% and Societe Generale surged 4.95%.
On the economic front, the ZEW survey of German investor sentiment dropped to its lowest level since 2022, as concerns grew over the broader impact of US tariffs on global trade. German bond yields edged higher, with the 10-year bund up 2 basis points to 2.53%, while UK yields slipped 1 basis point to 4.65%.
Markets now turn their attention to the European Central Bank’s meeting on Thursday, where a 25-basis point rate cut is widely anticipated.
Australia
Overseas markets were relatively subdued overnight, resulting in a marginal decline in ASX200 futures, which fell by 3 points—equivalent to a 0.06% drop. The Australian dollar continued its recent upward trend, with the AUD/USD pair rising 0.30% over the past 24 hours to open at 0.6348.
Minutes released by the Reserve Bank of Australia (RBA) of their April interest rate setting meeting on Tuesday indicated that the Board views the May meeting as “an opportune time to revisit the monetary policy settings.” During their April meeting, the Board agreed that risks associated with tariffs and the upcoming release of first-quarter inflation data would offer greater clarity on whether a rate cut would be warranted. The May meeting is also scheduled after the Federal election is to be held.
Many analysts now anticipate a 25-basis point rate cut in May, with some even forecasting a 50-basis point reduction. This expectation supported bond markets, pushing yields lower. The yield on the 2-year note fell by 1 basis point to 3.28%, while the 10-year yield declined by 4 basis points to 4.35%.
Equity markets also found modest support, with the ASX 200 gaining 13.10 points, or 0.17%, to close at 7,761.70. Hopes for further tariff concessions—combined with the absence of any new negative developments—encouraged cautious buying.
Four of the eleven sectors finished higher, with healthcare leading the gains, up 1.34%. CSL and ResMed outperformed after a Morgan Stanley analyst highlighted them as well-positioned to withstand the impact of U.S. tariffs. CSL rose 2.56% to $244.10, while ResMed added 0.62% to close at $33.82.
Financial stocks were also firm, with Westpac up 0.82% and Macquarie rising 0.84% to $180.15.
The materials sector outperformed the broader market, gaining 0.42%. A lift in iron ore prices supported minor advances among iron ore miners, while gold producers benefited from a renewed rally in the gold price. Evolution Mining climbed 3.92% to $8.21 after reaffirming its full-year production guidance. The company also reported an 11% increase in its average gold sale price for the quarter and higher copper output. Rare earth producer Lynas gained 3.08% to close at $8.02.
Commodities
Oil markets traded in a narrower range on Tuesday, reflecting a quieter session compared to recent weeks. Brent Crude edged down 0.11% to US$64.86, while West Texas Intermediate (WTI) held steady at US$ 61.52. Ongoing concerns around global tariffs have led banks to continue revising oil demand forecasts lower. The International Energy Agency (IEA) now projects oil demand will fall to its lowest level in five years. On the supply side, the U.S. Energy Information Administration (EIA) forecasted that U.S. oil production will peak in 2027, signalling the beginning of a decline following two decades of shale expansion.
Gold resumed its upward momentum, rising US$17.25, or 0.55%, to close at US$3,228. The rebound followed a brief round of profit-taking on Monday, with buyers returning to the market.
Bitcoin slipped 1.1% to US$83,896, while copper declined by US$23 to US$9,164 on the London Metal Exchange. The mild pullback in copper also narrowed the price spread between U.S. and European markets.
Iron ore remained relatively stable, ending the New York session at US$98.25—up 0.50% from the same time Tuesday. The commodity traded as high as US$98.70 during the Asian session before drifting lower in subsequent trading.
Economic Calendar
AU:
- Westpac Leading Index (Mar) – 12:00pm
China:
- GDP Growth Q1 – 1:00pm
- Retail Sales (Mar) – 1:00pm
US:
- Retail Sales (Mar) – 11:30pm
- Industrial Production (Mar) – 12:15am
- NAHB Housing Market Index (Apr) – 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.
