Tuesday's Markets Update (March 4, 2025)

06 Mar 2025 by rate3

On Tuesday, equities are predominantly down as the trade war escalates, with China's and CaMex's tariffs taking effect today. Meanwhile, Tesla reported a 50% sales drop in China. The Economic Optimism Index, which was at a three-year high in December, continues to decline, with personal finance and general economic perceptions remaining low, while another main component, which measures consumer confidence in federal economic policies, has stayed in the pessimistic zone for the fourth consecutive year. Treasuries fell as traders anticipate a change in the Fed's staunch anti-inflationary stance in light of the rapidly deteriorating economy.

World's Markets:

European stocks are in the red after the trade war started, particularly impacting the auto sector with Mexico's hubs and banks exposed to American credit, while defense equities continued to perform well. The EU unemployment rate, which reached over 8% during the lockdown and has steadily declined since 2022, stayed unchanged at 6.2% for the second month.
Meanwhile, the list of smaller countries benefiting from the trade war continues to expand, as Colombia's agricultural exports—30% of which go to America—surged by more than 40% in one month.
South Africa's GDP grew marginally, mostly due to agricultural sector expansion, nearly entering a recession after a decline in the previous quarter.
Indian stocks are down for the third straight session, led by tariff-sensitive sectors such as consumer goods, auto, and pharmaceuticals.
Commodities and Currencies:

The Japanese yen strengthened to a five-month high as investors sought refuge in untariffed safe-haven assets. Cotton prices plummeted after China included it in the retaliatory tariffs list. Natural gas prices continue to climb higher, and gold approaches an all-time high once again. At the same time, oil and the dollar continue to decline amid the expectation that the trade war will trigger a global recession.
Crypto:

BTC, SOL, ADA, and ETH remain suppressed as traders continue to actively de-risk in response to sharply rising economic calamities and geopolitical tensions.
The State Of Markets: Down, with the exception of defense stocks, equities on all continents are falling as investors liquidate positions, going into gold, anticipating the start of the global trade war.