The global financial markets are reacting to major trade policy developments from the United States. President Donald Trump has announced plans to impose 25% tariffs on all steel and aluminum imports starting Monday. Additionally, he is set to unveil reciprocal tariffs by Tuesday or Wednesday, which will take effect almost immediately. This escalation in trade tensions has sent ripples through equities, currencies, bonds, and commodities.

Stocks Hold Firm Despite Tariff Shock

Despite the tariff headlines, stocks have maintained a positive bias, with the Nasdaq (NQ) outperforming other indices. US steel stocks surged, reflecting optimism that domestic producers will benefit from the protectionist measures. Investors appear to be balancing concerns over global trade disruptions with broader economic resilience.

USD Mixed, JPY Weakens as Tariffs Dominate

The US dollar (USD) showed a mixed performance against its peers, as traders digested the tariff developments. Meanwhile, the Japanese yen (JPY) underperformed, suggesting that risk appetite remained intact despite the uncertainty surrounding trade policy.

Bond Markets Steady, Eurozone Outlook Under Pressure

In fixed income markets, US Treasuries (USTs) traded flat, while German Bunds saw slight gains as concerns over the Eurozone’s economic outlook weighed on sentiment. The potential for European exporters to face new tariff barriers added to investor caution.

Gold Hits Record High, Oil Rises on Trade Worries

Gold soared to a new all-time high (ATH) above $2,900 per ounce, driven by safe-haven demand amid trade tensions. Crude oil also climbed to session highs, reflecting ongoing market uncertainty and possible supply chain disruptions from the tariff measures.

Key Events Ahead

Looking ahead, markets will be closely watching several key economic indicators and corporate earnings reports:

• US Employment Trends and NY Fed SCE
• Chinese M2 Money Supply
• Bank of Canada (BoC) Market Participants Survey
• Speeches from ECB’s Schnabel and BoE’s Mann
• Earnings reports from McDonald’s, UniCredit, Generali, and Mediobanca

With markets on edge over trade policy shifts, all eyes will be on Trump’s next moves and their impact on global economic stability.