United States
U.S. markets moved sharply higher on Monday as investors responded positively to signs that the US administration may pursue a more targeted approach to upcoming tariffs. Reports suggested that President Trump is likely to exclude certain sectors from the reciprocal tariffs planned for April, fuelling hopes that the overall economic impact could be less severe. While officials cautioned that the situation remains fluid, the prospect of country-specific concessions helped ease fears of a full-scale global trade war.
This shift in sentiment sparked a broad-based rally across equities. Technology stocks, which had been under pressure in recent weeks, rebounded strongly. Tesla led the charge, soaring 11.93 percent with a US$29.68 gain to close at US$278.39. The renewed optimism was felt across the board, with analysts and investors interpreting the evolving trade stance as a sign that the worst-case scenario might be avoided.
All three major indices recorded significant gains. The Nasdaq Composite rose by more than 400 points, finishing the session up 2.27 percent at 18,188.59. The Dow Jones Industrial Average climbed 1.42 percent to 42,583.32, while the broader S&P 500 advanced by 1.76 percent, adding 100 points to close at 5,767.57. All sectors of the S&P 500 ended the day in positive territory, with consumer discretionary and communication services leading the gains.
The consumer discretionary sector was buoyed not only by Tesla but also by a strong performance from Amazon, which rose 3.59 percent. Technology names saw widespread buying interest, with Nvidia gaining 3.15 percent to US$121.41 and Meta Platforms jumping 3.72 percent to US$618.44.
Financial stocks also rallied, particularly within the banking sector, which climbed 2.31 percent. Investment banks were standouts, with Goldman Sachs adding 2.65 percent and Morgan Stanley up 3.44 percent.
Reflecting the shift in market tone, the VIX index — often referred to as Wall Street’s “fear gauge” — fell to a three-week low of 17.46. The easing of volatility, combined with strong risk appetite, was further underscored by a surge in corporate bond issuance. As many as 16 companies were poised to raise a combined US$30 billion this week in high-grade debt. Theses factors led to an increased pressure on interest rates. The U.S. 10-year Treasury yield rose 9 basis points to 4.33 percent, while the 30-year yield climbed 7 basis points to 4.66 percent. The U.S. dollar edged slightly higher on the day, rounding out a session that saw risk sentiment firmly return to the forefront.
Europe
European shares began the week on a cautious note, with markets drifting slightly lower as traders remain cautious as to the effects of reciprocal tariffs to be introduced on April 2nd and more commentary of a “flexible” approach from the US administration. The Euro Stoxx 600 slipped 0.13% to close at 548.93, while the UK’s FTSE 100 declined by 0.10% to 8,638.01.
Most sectors ended the session in negative territory, with only three posting gains. Technology stocks led the advancers with a strong rebound, while consumer staples lagged behind as the worst-performing sector.
Mining stocks were in demand as both copper and iron ore prices rose. Anglo American gained 2.24%, Rio Tinto PLC climbed 1.48%, and copper miner Antofagasta surged 2.27%. The rally in mining shares was supported by JP Morgan, which upgraded its rating on European miners from “underweight” to “overweight” due to expectations of a stronger outlook from China, a weaker U.S. dollar, and potential supply disruptions linked to tariffs.
In corporate news, German pharmaceutical and agricultural giant Bayer dropped 6.94% after a Georgia judge ordered the company to pay US$2.1 billion in damages to a plaintiff who claimed the weedkiller Roundup caused cancer. Bayer stated that it disagreed with the decision and would appeal the verdict.
Economic data released through Purchasing Managers’ Indexes (PMIs) showed signs of a slight improvement in European manufacturing. The Eurozone manufacturing PMI rose to 48.7 in March, up 0.9 points from February. In Germany, the increase was more notable, with the composite PMI — which includes both manufacturing and services — rising to 50.9, marking the strongest reading in nearly a year and indicating a return to expansion.
Bond yields remained steady, with 10-year government bonds in Germany and the UK unchanged at 2.76% and 4.71%, respectively.
Australia
The Australian equity market recovered from early losses to close slightly higher on Monday, gaining 0.07% or 5.7 points to finish at 7,936.90. However, only three of the eleven sectors ended in positive territory, led by Financials and Consumer Discretionary. The worst-performing sector was Consumer Staples, which gave back some of Friday’s strong gains that followed the ACCC’s report into the supermarket sector. Woolworths and Coles fell by 1.67% and 2.07% respectively, as traders took profits after the recent bounce.
The Financials sector rose 1.06%, supported by reduced market volatility and renewed interest in the banks. Commonwealth Bank (CBA) gained 1.39% to $147.63, while NAB led the major banks, adding 2.20% to close at $33.91. However, mortgage insurer Helia was the sector’s standout laggard, plunging 25.57% to $1.24 after revealing that its largest customer, CBA, is in discussions with alternative mortgage insurance providers. CBA accounted for 44% of Helia’s gross written premiums in 2024.
Wesfarmers also benefited from the calmer market environment, rising 1.68% or $1.19 to close at $72.03.
Despite a 1.4% rise in iron ore prices during Asian trading, performance among miners was mixed. BHP fell 0.56% to $39.23, while Rio Tinto edged up 0.44% to $119.10. Fortescue Metals saw stronger gains, rallying 3.23% to $16.30 on the back of broker upgrades.
In the materials sector, James Hardie Industries dropped sharply, falling 14.53% to $40.00 after announcing its acquisition of AEZK, a U.S.-based home building supplies company, for US$8.75 billion. The deal, a mix of cash and shares, values AEZK at US$56.88—representing a 26% premium to its average share price over the past month. The acquisition is seen as a bold bet on the U.S. housing market, and the initial reaction from Australian investors was negative. However, the company’s CEO emphasised that the deal is focused on long-term growth during a call with shareholders.
On the economic front, the Australian Purchasing Managers’ Index (PMI) rose to 51.3 in March, up from 50.6 in February, indicating a modest expansion. The biggest improvement was seen in the manufacturing component. Meanwhile, bond yields moved slightly higher, with the 10-year yield rising 1 basis point to 4.40%.
The overnight rally in the US has seen gains in the ASX200 futures with that contract adding 0.45% with a gain of 36 points, suggesting a good start to the day as investors await the release of the Australian Budget. The AUDUSD was also helped by the risk on appetite with the currency trading at 0.6286, a gain of .20%.
Commodities
Copper prices rallied to start the week, with the London contract adding US$100 to close at US$9,956 per tonne—a 1% gain. A similar move was observed in early New York trading, although the price differential between the two contracts remains at historically wide levels. This premium, largely driven by anticipated tariffs, has encouraged the physical shipment of copper to the U.S. to capture the price advantage.
Iron ore prices also strengthened, closing in New York at US$102.00—up US$1.75 or 1.75% from Saturday morning. Gains were initially seen during the Asian trading session and were sustained through the remainder of the day.
Oil prices advanced on Monday amid ongoing buying interest, despite the absence of major new developments. West Texas Intermediate rose 1.36% to US$69.20, gaining 92 cents, while Brent crude added 1.30% to settle at US$73.10. A fresh U.S. tariff announcement targeting Venezuelan oil imports added to the bullish sentiment. The U.S. government stated that any nation purchasing oil or gas from Venezuela would incur a 25% tariff on subsequent trades with the U.S., raising concerns about global supply constraints.
Gold fell as the U.S. dollar strengthened and investors rotated back into risk assets. The precious metal dropped US$15.65, or 0.52%, to close at US$3,006.50.
Meanwhile, Bitcoin surged 3.6%, climbing to US$88,236, continuing its strong upward momentum.
Economic Calendar
AU:
- Australian Government Budget 2025/2026
US:
- Home Prices Index (Jan) – 12:00am
- Conference Board Consumer Confidence (Mar) – 1:00am
- New Home sales (Feb) – 1.00am
- Richmond Fed Manufacturing Index (Mar) – 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.
