Equity Markets Close Lower Amid Fresh U.S. Tariff Measures
Global equities ended broadly lower on Monday, wrapping up a turbulent session as investors digested the U.S. administration’s latest tariff decision. A newly imposed 10% duty on all U.S. imports has intensified fears of an economic slowdown and prolonged inflationary pressure.
Markets experienced a brief uptick during the European afternoon session on reports of a possible 90-day delay in tariff implementation. However, those claims were swiftly denied, leading equities to retreat once more.
- Dow Jones Industrial Average dropped by 0.9%
- S&P 500 slipped 0.2%
- Nasdaq Composite gained 0.1%, supported by megacap tech names such as Amazon and Nvidia
Sentiment was weaker in Asia, with Japan’s Nikkei falling approximately 8% and Hong Kong’s Hang Seng Index declining over 13%. In the bond market, yields reversed earlier losses, with the 10-year U.S. Treasury yield closing near 4.2%.
Investor Caution Grows as Volatility Spikes
Despite the negative start to the week and lack of clarity on tariffs, some market participants remain hopeful for a shift in policy. Analysts note a strong appetite for a market rebound if signs of policy moderation emerge.
Still, officials have confirmed that the tariff timeline will remain unchanged ahead of the 9 April implementation date. Market volatility surged, with the VIX reaching its highest point since August 2024, and major indices touching their lowest intraday levels in more than a year.
Global Market and Economic Snapshot
Asian Markets Rebound Sharply
Tuesday morning saw a broad rebound across Asian equities, led by:
- Japan’s Nikkei 225 soaring nearly 7%, supported by a weaker yen and notable gains in Tokyo Electron and SoftBank
- China’s CSI 300 rising 0.5%, driven by state-backed buying
- Hong Kong’s Hang Seng Index climbing up to 3%
- Australia’s ASX 200 advancing nearly 2%
- South Korea’s KOSPI adding 1%
U.S. and European Futures Show Cautious Optimism
Futures for U.S. and European equities traded higher early Tuesday, suggesting cautious optimism ahead of key inflation data expected later this week. Markets are closely watching developments around trade discussions, particularly after reports that nearly 70 countries, including Japan, have approached the U.S. regarding tariff concerns.
European Markets Continue to Struggle
European equities continued their downtrend:
- Stoxx 50 fell 5.4%
- Stoxx 600 dropped 4.5%
Losses were widespread across sectors, with utilities, retail, and financial services among the weakest performers. A brief rally sparked by speculation of a tariff pause was erased after White House denials, leaving markets vulnerable to further volatility.
Currency and Commodity Update
The U.S. Dollar Index eased to around 103 on Tuesday, pressured by ongoing trade tensions and concerns over China.
- EUR/USD traded at 1.0964, showing modest euro strength ahead of inflation data that could shape the Federal Reserve’s policy stance.
Oil prices ticked higher in Asian trading:
- Brent crude rose 1.1% to $64.93 per barrel
- WTI crude increased 1.3% to $61.21
Traders remain cautious about the effects of U.S.-China trade escalation, weakening demand outlooks, and geopolitical risks in regions like the Middle East and Ukraine.
Equities in Focus
Company-Specific Market Moves
- Samsung Electronics posted a 0.2% decline in Q1 operating profit, smaller than expected, driven by robust memory chip sales and smartphone demand. Demand was partially boosted by customers stockpiling ahead of potential U.S. tariffs. Analysts expect a weaker Q2 due to challenges in securing new high-bandwidth memory chip clients and a drop in shipments.
- Apple saw increased iPhone sales over the weekend in anticipation of tariff-induced price hikes, with retail foot traffic rising. Despite this short-term boost, ongoing iPhone sales declines and tariff concerns contributed to an 18% share drop over five days.
- Marvell Technology shares rose 3.5% after agreeing to sell its Automotive Ethernet division to Infineon Technologies for $2.5 billion. The deal, set to close by 2025, is expected to generate $225–250 million in revenue for fiscal 2026.
- MercadoLibre announced a $5.8 billion investment in Brazil, a 47.8% increase YoY. The funds will go toward logistics, e-commerce tech, fintech, and adding around 14,000 jobs, expanding its Brazilian workforce to over 50,000 by the end of 2021.
- Broadcom gained over 5% in after-hours trading following the announcement of a $10 billion share repurchase program, set to continue until December 2025. The move reflects the company’s confidence in its infrastructure software and AI business.
Crypto, M&A, and Tariff Impact
- Strategy Inc shares dropped over 8% after revealing a $5.91 billion unrealised loss on bitcoin holdings for Q1 2025. This was partially offset by a $1.69 billion income tax benefit. The loss stems from the adoption of new crypto asset accounting standards, effective January 2025.
- Banco BPM reached the minimum acceptance threshold for its takeover of Anima Holding, with 67.976% of shareholders agreeing. This increases BPM’s total stake to 89.949%, confirming the bid’s success.
- Elon Musk appealed directly to President Trump to ease the trade tariffs, warning of disruptions to Tesla due to tariffs on Chinese components. Despite Musk’s lobbying—which included social media criticism of trade advisor Pete Navarro—tariffs are scheduled to go into effect on Wednesday, potentially impacting multiple U.S. firms.
Analyst Calls and Ratings
- Wedbush analyst Daniel Ives cut Apple’s price target to $250 from $325, citing tariff-related cost risks and weaker global demand. Ives warned of potential price hikes, supply chain issues, and global demand destruction.
- Truist Securities initiated coverage of Reddit with a Buy rating and a $150 price target, noting rapid growth, expanding margins, and significant potential in digital advertising and AI.
- UBS downgraded Caterpillar to Sell and reduced its target to $243, citing macroeconomic risks and slowing demand in construction, mining, and oil & gas sectors. 2026 EPS is expected to fall more than 25% below consensus.
- Bernstein downgraded General Motors to Underperform, slashing its price target to $35. Tariff pressures and weak consumer sentiment could cut EPS by over 50% and reduce free cash flow by $6 billion from 2025 to 2027.
Key Events and Data Releases
Today’s economic agenda includes:
- NFIB Small Business Optimism Index
- Speeches from Federal Reserve officials
- Updates from the Energy Information Administration (EIA), including a postponed report
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