Global equities attempt a rebound after tariff-induced

General market commentary

Equity markets ended broadly lower on Monday, capping off a volatile session as investors continued to react to the U.S. administration’s latest tariff measures. The new 10% duty on all U.S. imports has heightened fears of an economic slowdown and sustained inflationary pressures. Although markets briefly rallied during Europe’s mid-afternoon session, on reports suggesting a possible 90-day delay in implementation, those claims were quickly refuted, sending equities back into negative territory by the close. The Dow declined by 0.9%, the S&P 500 slipped 0.2%, while the tech-heavy Nasdaq bucked the trend, gaining 0.1% as several megacap tech shares, including Amazon and Nvidia, moved higher. Elsewhere, the mood was even more negative, with Japan’s Nikkei falling roughly 8% and Hong Kong’s Hang Seng Index down more than 13%. Meanwhile, bond yields reversed earlier declines, with the 10-year U.S. Treasury yield closing around 4.2%.

Despite the rough start to the week and continued tariff uncertainty, market sentiment reveals a strong underlying desire for reversal. According to market observers, investors appear poised to rally on any hint of policy moderation. However, with officials reiterating that no changes to the tariff timeline will be made before the 9 April start date, caution continues to dominate. Volatility spiked, with Wall Street’s so-called ‘fear gauge’ reaching its highest level since August 2024, and major indices hitting their lowest intraday levels in over a year. Overall, while market conditions remain fragile and reactive to trade-related developments, Monday’s trading session underscored both the sensitivity of investor sentiment and the importance of diversification amid ongoing global uncertainty.

Latest market and economic update

Asian markets staged a broad rebound this morning, led by Japan’s Nikkei 225 which soared nearly 7% thanks to a weaker yen and strong gains in tech shares such as Tokyo Electron and SoftBank. China’s CSI 300 rose 0.5% amid state-backed buying, Hong Kong’s Hang Seng climbed as much as 3%, Australia’s ASX 200 gained nearly 2%, and South Korea’s KOSPI added 1%.

U.S. and European equity futures were higher this morning, signalling cautious optimism as investors brace for key inflation data later this week, which could provide clarity on the Federal Reserve's next move. With ongoing tariff tensions, market attention will be on any developments related to trade negotiations, particularly following reports that nearly 70 countries, including Japan, have approached the US to discuss tariff issues.

European equities continued their downward trend yesterday, with the Stoxx 50 dropping 5.4% and the Stoxx 600 falling 4.5%, driven by widespread losses across multiple sectors. Utilities, retail, and financial services were among the worst performers, while a brief recovery was sparked by speculation of a tariff pause before being dashed by White House denials, leaving markets vulnerable to further uncertainty surrounding potential tariff hikes on China.

The US dollar index eased to around 103 on Tuesday, as trade uncertainties and escalating tensions with China weighed on sentiment, trimming recent gains. EUR/USD traded at 1.0964, reflecting a modest recovery for the euro amid the ongoing trade turmoil and market anticipation of upcoming inflation data that could influence the Fed’s next steps.

Oil prices rose modestly in Asian trade this morning, recovering some of the recent losses as traders remain cautious over the impact of escalating U.S.-China trade tensions and concerns about slowing demand. Brent crude rose 1.1% to $64.93 per barrel, while WTI increased by 1.3% to $61.21, with markets focused on Trump’s upcoming tariffs and China’s retaliatory measures, alongside persistent geopolitical risks in the Middle East and Ukraine.

Equities on the move

The following companies experienced moves in their share price driven by analyst ratings, quarterly earnings, or other news:

Samsung Electronics reported a smaller-than-expected 0.2% decline in first-quarter operating profit, driven by strong memory chip sales and solid smartphone demand, partly fuelled by customers stockpiling ahead of potential U.S. tariffs. Despite the positive results, analysts expect second-quarter performance to weaken, with Samsung facing challenges in securing new customers for high-bandwidth memory chips and a decline in shipments following the preemptive stocking in Q1.

Apple saw a surge in customer demand for iPhones ahead of anticipated price hikes due to President Trump’s upcoming tariffs on Chinese imports, with retail stores reporting increased foot traffic over the weekend. Despite the short-term boost in sales, Apple faces ongoing challenges, including a prolonged decline in iPhone sales and concerns over the long-term impact of the tariffs, which have contributed to an 18% drop in its shares over the past five days.

Marvell Technology's shares rose 3.5% after the company announced the sale of its Automotive Ethernet business to Infineon Technologies for $2.5 billion, aligning with Marvell’s strategy to focus on data infrastructure. The sale, expected to close by 2025, is projected to generate $225-250 million in revenue for fiscal 2026, with Marvell confident that the deal will enhance shareholder value and ensure continued growth for the Automotive Ethernet business.

MercadoLibre announced plans to invest the equivalent of $5.8 billion in Brazil, marking a 47.8% increase from the previous year, as part of its strategy to strengthen its presence in the country. The investment will focus on logistics, e-commerce technology, fintech, and creating around 14,000 new jobs, helping boost the company’s workforce in Brazil to over 50,000 by the end of 2021.

Broadcom's shares rose over 5% in after-hours trading following the announcement of a new $10 billion share repurchase programme, reflecting the company’s confidence in its diversified portfolio and strong cash flow. The buyback, set to run until December 2025, aims to enhance shareholder value amid the company’s strategic position in infrastructure software and generative AI.

Shares of Strategy Inc fell over 8% yesterday following the announcement of a $5.91 billion unrealised loss on its bitcoin holdings for Q1 2025, partially offset by a $1.69 billion income tax benefit. The loss was due to the adoption of new accounting standards for crypto assets, which are set to take effect in January 2025, prompting concerns about the company's strategy and its exposure to volatile digital asset valuations.

Banco BPM has successfully met the minimum acceptance threshold for its takeover bid of Anima Holding, with 67.976% of Anima’s shareholders agreeing to the offer. This brings Banco BPM’s total stake in Anima to 89.949%, confirming the success of the takeover.

Elon Musk personally appealed to President Trump to ease the impact of trade tariffs, as Tesla faces potential disruption from higher tariffs on components imported from China and other affected countries. Despite Musk’s efforts, which included social media criticism of trade advisor Pete Navarro, the tariffs are set to take effect from Wednesday, with Tesla potentially feeling the strain along with other major U.S. companies.

Wedbush analyst Daniel Ives has lowered Apple’s price target to $250 from $325, citing concerns that tariffs on China will severely impact the company’s cost structure and consumer demand, given its reliance on Chinese production. Ives warned that the tariffs could lead to significant price hikes for Apple products, with potential disruptions to its supply chain and a risk of “demand destruction” globally.

Truist Securities initiated coverage of Reddit with a Buy rating and a $150 price target, citing the platform’s rapid growth, potential for margin expansion, and strong position in digital advertising. With a target of reaching 1 billion daily active users and significant monetisation opportunities, Reddit is expected to nearly double its revenue by 2027, bolstered by its unique ad model and growing AI capabilities.

UBS downgraded Caterpillar to Sell and reduced its price target to $243, citing macroeconomic risks from tariffs and weakening global demand that could negatively impact key sectors like construction, oil & gas, and mining. The firm expects a significant earnings decline, with 2026 EPS projected to fall more than 25% below consensus, driven by lower revenue forecasts and margin pressures.

Bernstein downgraded General Motors to Underperform and cut its price target to $35, warning that new vehicle and parts tariffs, combined with declining consumer sentiment, will significantly impact earnings and free cash flow. The firm also slashed its 2026 EPS forecast by over 50%, forecasting a $6 billion drop in GM's free cash flow between 2025 and 2027.

Upcoming data and events

Today's economic agenda features the NFIB Small Business Optimism Index, speeches from Fed officials, and updates on energy markets, including the EIA's postponed report.

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