Global stock markets remained unfazed by the imposition of new tariffs on Monday, even as 25% levies on steel and aluminum imports took effect late that night. These levies, which include finished products, did not initially disrupt trading activities. However, futures markets began to show signs of decline as the levies came into force, indicating a cautious outlook from investors.
The S&P 500 and Eurostoxx 50 indices are anticipated to open lower on Tuesday, reflecting investor apprehension. Market participants are keenly awaiting further details on U.S. President Trump's reciprocal tariff plan, alongside Fed Chairman Powell's much-anticipated testimony. These elements are expected to play a significant role in shaping market sentiment in the coming days.
In the currency markets, the GBP/USD pair is trading in negative territory around 1.2350. The pair struggles to gain traction amidst investor caution, as participants remain on edge over potential economic implications of the tariffs. Similarly, the EUR/USD is trading in a narrow range near 1.0300, having posted minor losses on Monday.
The commodities market also experienced some volatility. Gold, after reaching a record high of $2,942 during the Asian session, staged a downward correction. Despite this correction, the precious metal remains above $2,900, buoyed by modest USD strength.
U.S. President Trump's decision to raise import duties on steel and aluminum imports to a flat 25% has been closely scrutinized by global investors. This move is part of a broader strategy to protect domestic industries but has raised concerns about potential retaliatory actions from trading partners.