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Markets Update: U.S. stocks declined amid ongoing uncertainties surrounding tariffs. European defence stocks surged in response to increased Ukraine-related spending. President Trump suggested the possibility of a cryptocurrency reserve, which provided a boost to Bitcoin.
Global Markets Roundup: 3 March 2025
European markets advanced on Monday, driven by gains in defence stocks following regional leaders' agreement to draft a peace plan for Ukraine. Concurrently, Wall Street saw a decline as investors awaited President Donald Trump’s impending decision on tariffs for Canada and Mexico, expected early Tuesday. The euro appreciated, while the dollar weakened, further contributing to trade policy uncertainty.
European Gains Driven by Ukraine and Defence Spending
Following President Volodymyr Zelenskiy's meeting with President Trump at the White House, European leaders initiated the drafting of a peace plan for Ukraine. This development bolstered Western unity and defence commitments, driving up the stocks of European arms manufacturers.
Reports have also surfaced indicating that Germany's possible new government is considering the establishment of a dedicated defence fund, further propelling the sector.
The pan-European STOXX 600 index advanced by 1.12%, with BAE Systems and other defence firms leading the gains.
Wall Street Declines Amid Tariff Uncertainty
U.S. markets experienced a slight decline as uncertainty surrounding President Trump’s proposed 25% tariffs on Canadian and Mexican imports persisted, including a 10% duty on Canadian energy. Scheduled to take effect Tuesday at 12:01 a.m. EST, these tariffs have heightened concerns about North American trade relations.
“There is ongoing speculation regarding the implementation of these tariffs,” Ghriskey noted.
On Wall Street:
· Dow Jones decreased by 108.71 points (0.25%) to 43,732.20
· S&P 500 fell by 16.32 points (0.27%) to 5,938.18
· Nasdaq Composite dropped by 89.63 points (0.48%) to 18,757.64
U.S. manufacturing data remained stable, although factory prices surged to a nearly three-year high, and supply chain delays suggested potential production constraints due to the tariffs.
Currencies
The euro EURUSD strengthened by 1.1% to $1.0489, while the dollar index DXY, which gauges the dollar's performance against a basket of currencies, decreased by 0.72% to 106.54. The dollar fell by 0.27% against the Japanese yen, reaching 150.19 yen per dollar. The Canadian dollar and the Mexican peso appreciated as negotiations with Canada and Mexico continued.
Crypto Markets Respond Positively to Trump's Remarks
Bitcoin initially surged over the weekend before retreating 4% on Monday after Trump floated the idea of a U.S. strategic crypto reserve. He hinted that the fund would include Bitcoin, Ether, XRP, Solana, and Cardano, but provided no further details.
Still, it was enough to revive bullish sentiment in crypto markets.
Bitcoin last traded at $90,129, having rebounded 20% from last week’s lows below $80,000. Bitcoin experienced an initial surge over the weekend before declining by 4% on Monday following President Trump's suggestion of establishing a U.S. strategic cryptocurrency reserve. He speculated that the reserve would comprise Bitcoin, Ether, XRP, Solana, and Cardano, but did not provide further specifics.
Bond Market and Commodity Trends
U.S. Treasury yields declined as the tariff deadline approached, with the 10-year yield falling to 4.197%, its lowest since December 9. Markets now anticipate 65 basis points of Fed rate cuts this year, up from less than 50 basis points previously. The European Central Bank is expected to cut rates on Thursday, although its policy outlook remains uncertain.
In the commodities market, oil prices declined, with U.S. crude dropping by 0.6% to $69.35 per barrel, while Brent decreased by 0.4% to $72.52. Gold prices rose by 1.07% to $2,889.12 per ounce.
In the agricultural commodities sector, CBOT corn ZC1! decreased by 12-1/2 cents to $4.57 per bushel after reaching a low of $4.54-1/2, the lowest since January 9. CBOT soybeans ZS1! declined by 12-3/4 cents to $10.13 per bushel, and wheat ZW1! dropped by 8 cents to $5.47-3/4 per bushel. On Monday, May ICE NY cocoa (CCK25) closed by -912 (-10.00%) lower and May ICE London cocoa #7 (CAK25) closed down by -775 (-10.56%).
Cocoa prices experienced a notable decline, reaching a 3.5-month low. This downturn followed the International Cocoa Organization's (ICCO) forecast last Friday of a global cocoa surplus of 142,000 MT for 2024/25, marking the first surplus in four years. The ICCO also projected a 7.8% year-over-year increase in global cocoa production for 2024/25, reaching 4.84 MMT.
Investors are also focused on the upcoming U.S. payrolls report on Friday, which may further influence rate expectations.
Looking forward refer to the economic calendar below to see the upcoming events scheduled for today and the rest of the week.
General news - Information source from multiple newswires.
The article and the data is for general information use only, not advice!
The Trade Academy Team