Markets on edge ahead of tariffs rollout

General market commentary

Yesterday’s trading session in the US ended with a mixed performance as investors awaited President Donald Trump’s tariff announcement. The S&P 500 and Nasdaq Composite posted modest gains, with the Nasdaq rising nearly 0.9% and the S&P 500 increasing about 0.4%, while the Dow Jones Industrial Average closed virtually unchanged. Growth sectors like consumer discretionary and technology outperformed, while healthcare lagged, particularly due to a sharp decline in Johnson & Johnson’s shares, which dropped over 7.5% after a U.S. bankruptcy judge rejected its talc settlement proposal.

Uncertainty over Trump’s tariff plans has been a major driver of market volatility since mid-February, with the S&P 500 falling roughly 8% from its all-time high. The upcoming announcement is expected to provide some clarity, although market responses will likely continue to vary. In Europe, markets closed mostly higher following a 2.2% year-on-year rise in Eurozone inflation. Meanwhile, US economic data showed slightly weaker-than-expected job openings and a contraction in manufacturing demand, suggesting some economic softness. Despite these challenges, a diversified equity portfolio has been helpful in navigating ongoing volatility.

Latest market and economic update

Asian equities traded in a narrow range on Wednesday, with Japan's Nikkei 225 largely flat and Hong Kong's Hang Seng gaining 0.4%, while South Korea's KOSPI dipped 0.3% amid political instability. China’s Shanghai Composite edged up 0.2%, while Australia’s S&P/ASX 200 and Singapore’s Straits Times Index saw modest movements, as investors awaited key tariff announcements from U.S. President Trump.

U.S. equity futures remained steady overnight as investors awaited the implementation of President Trump’s new tariffs, which could influence market sentiment. Economic data showing continued weakness in the factory sector and a decline in job openings are likely to keep investors cautious ahead of the open.

European equity markets rebounded on Tuesday, with the Stoxx 50 and Stoxx 600 both rising over 1%, recovering from a four-session losing streak amid uncertainty over President Trump’s upcoming tariffs. In corporate news, Thyssenkrupp surged more than 7% after an upgrade to "buy" from Kepler Cheuvreux, driven by expectations of increased steel and defence spending in Germany.

The U.S. dollar firmed slightly on Wednesday, with the euro holding steady at $1.0792 and sterling unchanged at $1.2924 as traders awaited details of President Trump’s tariff plans. Despite a minor rise, the dollar’s performance remains cautious amid ongoing concerns over the potential economic impact of new trade barriers.

Oil prices showed little movement this morning as traders awaited U.S. President Trump’s tariff announcement and an OPEC+ meeting later in the week, which could include plans to increase production. Crude prices have been supported by geopolitical tensions, but concerns over Trump’s policies potentially undermining global growth and oil demand have kept gains in check.

Equities on the move

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

Visa has offered Apple approximately $100 million to take over its credit card partnership from Mastercard, as part of a bid to secure the Apple Card, with American Express also competing to replace Mastercard. Goldman Sachs, which previously partnered with Apple on the card, has ended its alliance, and several financial firms, including Barclays, Synchrony Financial, and JPMorgan Chase, are in talks to become the new issuer.

Banco Santander has secured a Canadian banking licence, marking a significant step in its ongoing expansion across the Americas. In addition to its entry into Canada, the bank has been strengthening its presence in the US and Mexico, including the launch of new digital banking ventures in both countries.

Telehealth company Hims & Hers Health revealed late on Monday that it intends to start offering Eli Lilly's weight-loss drug, Zepbound, through its platform. Following the announcement, the company’s shares saw a significant boost, rising by over 5% in yesterday’s session.

A US federal judge ruled that Estée Lauder must face a lawsuit for allegedly misleading shareholders about the impact of a Chinese crackdown on grey-market sales, where individuals resell goods outside official channels. The lawsuit claims the company concealed the negative effects of the "daigou" market, leading to a sharp drop in its share price.

JPMorgan has added Boeing to its Analyst Focus List, citing strong production momentum, improving deliveries, and key contract wins, including the F-47 deal, as reasons for its inclusion. The firm maintains an Overweight rating, with growing confidence in Boeing's ability to overcome supply chain challenges and capitalise on new defence and commercial aerospace opportunities.

Jefferies downgraded several major airline shares, including American Airlines, Delta, Air Canada, and Southwest Airlines, citing weaker consumer sentiment, slowing revenue growth, and increasing macro uncertainty. United Airlines remains the firm's only Buy-rated airline, as analysts expect it to perform better than its peers despite industry challenges.

Argus Research downgraded Lululemon Athletica to "hold" from "buy," citing concerns over an ageing product line, U.S. tariffs, and growing competition from Nike and Under Armour. Despite strong margins and financial stability, the firm expects U.S. sales to weaken in fiscal 2026, and lowered its earnings per share estimate for the company while maintaining a long-term growth projection of 19%.

Upcoming data and events

In the U.S., key events today include the ADP employment change for March, February's factory orders, and the announcement of President Trump's reciprocal tariff plans. In Europe, focus will be on the ECB speeches, bond auctions, and the final HCOB Manufacturing PMIs for March, along with unemployment and inflation data across the region.

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