Global stock markets displayed resilience on Monday, seemingly unfazed by the looming tariff concerns that took center stage. As 25% levies on steel and aluminum imports came into effect late Monday night, market participants closely monitored the situation. The levies, which include finished products of steel and aluminum, have sparked apprehensions across various trading platforms.
Futures markets noted a dip following the implementation of these levies, signaling cautious sentiment among investors. The S&P 500 and Eurostoxx 50 indices are projected to open lower on Tuesday as traders await further clarity on US President Trump's proposed reciprocal tariff plan. This uncertainty has led market participants to tread carefully.
Meanwhile, investors are also paying keen attention to Federal Reserve Chairman Jerome Powell’s testimony, which is expected to shed light on the central bank's monetary policy outlook. The anticipation surrounding Powell’s remarks has contributed to the cautious stance adopted by the markets.
Currency markets reflected this sentiment as well, with GBP/USD trading in negative territory around 1.2350 on Tuesday. Additionally, the EUR/USD pair remained range-bound near 1.0300 after experiencing modest losses on Monday. These movements underscore the prevailing caution in the financial landscape.
In commodities, gold experienced a downward correction from its record-high of $2,942 during the Asian session on Tuesday. Despite this correction, gold prices managed to stay above $2,900, supported by modest strength in the US dollar. Some intraday profit-taking was observed as traders shifted their focus to Powell's upcoming testimony.
The global financial markets are navigating through a period marked by the implementation of President Trump's tariffs and impending insights from the Federal Reserve. As investors seek further details regarding the tariff plan and monetary policy direction, cautiousness is likely to persist in the near term.