Last week, global markets experienced significant fluctuations as tariff concerns persisted and the European Central Bank (ECB) implemented consecutive interest rate cuts. The US stock market saw a broad decline, with the Dow Jones Industrial Average dropping 2.37%, the Nasdaq Composite falling 3.45%, and the S&P 500 decreasing by 3.10%. In Europe, indices showed mixed results: the UK’s FTSE 100 fell 1.47%, Germany’s DAX 30 rose 2.03%, and France’s CAC 40 edged up by 0.11%.
This week, the focus will be on the US inflation data for February, as investors remain concerned about President Trump’s future tariff decisions. The Bank of Canada is expected to cut rates by 25 basis points due to economic concerns over US tariffs on Canadian imports. Meanwhile, major institutions are set to release monthly market reports as crude oil futures hit a three-year low.
President Trump recently announced tariffs of up to 25% on Canadian and Mexican imports, with a delay on similar measures for automotive products. The US is also planning to impose a 25% tariff on EU steel and aluminum. The February Consumer Price Index (CPI) will be closely monitored, as higher-than-expected results could weaken the Federal Reserve’s policy easing expectations. Concerns over “stagflation,” where economic growth slows while inflation rises, are growing among investors.
Recent surveys by S&P Global and the Institute for Supply Management (ISM) indicate that tariff concerns are already affecting pricing, with some companies preemptively raising prices. Food prices are also increasing, potentially exacerbating inflation. Additionally, the February Producer Price Index (PPI) will provide further insights into underlying price pressures.
As doubts about the US economy’s strength grow, the University of Michigan’s March consumer survey will be crucial for assessing tariff uncertainty and employment market sentiment. Last month’s survey raised concerns as consumer inflation expectations climbed to a 30-year high.
Key earnings reports this week include Oracle, Adobe, and Lennar, with Dollar Tree and Dollar General’s performance also under scrutiny. Chinese companies Li Auto and Futu Holdings will release their earnings as well.
Crude oil prices fell for the seventh consecutive week, with WTI crude down 3.90% to $67.04 per barrel and Brent crude down 3.36% to $70.36 per barrel. OPEC+ announced plans to continue increasing production, despite expectations of a delay. However, Russia’s Deputy Prime Minister Novak suggested that OPEC+ might reconsider if market imbalances occur.
Gold prices rebounded due to safe-haven demand, with COMEX gold futures rising 1.91% to $2911.61 per ounce. The US dollar index hit a four-month low, with expectations of a 75 basis point rate cut by the Federal Reserve by year-end. Fed Chair Powell stated that the Fed would take a cautious approach to monetary policy easing, noting the economy’s continued strength.
