Trump tariffs drive market sentiment as Nvidia earnings fade
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Investor focus has shifted sharply toward U.S. trade policy and the broader economic outlook, with Nvidia’s highly anticipated earnings release making only a modest impression. While the AI giant’s results confirmed continued demand for high-performance computing, they lacked the kind of blowout numbers that could have reignited market enthusiasm. Gross margins slipped, though the company reassured investors that they should rebound by mid-year.
In Asian markets, Nvidia’s earnings barely registered, as tech stocks moved in different directions. Instead, attention was drawn to the latest developments on tariffs, with U.S. President Donald Trump’s shifting stance on trade sending mixed signals. While he extended the tariff deadline for Canada and Mexico to April 2, a White House official later suggested that the original March 4 deadline could still stand. Meanwhile, Trump confirmed that Europe is in his sights, proposing a 25% “reciprocal” tariff on automobiles and other goods, with further details expected soon.
This uncertainty has fueled market volatility, pushing U.S. bond yields and the dollar off recent lows. However, concerns about the health of the U.S. economy are growing. Treasury Secretary Scott Bessent warned that conditions are “brittle beneath” the surface, reinforcing a growing view that the Federal Reserve may need to ease policy sooner than previously expected. Traders now anticipate two rate cuts in 2025, with the first likely in July and a second as early as October, according to LSEG data.
Thursday’s U.S. GDP data and durable goods orders will be closely watched for further signs of economic weakness, while Friday’s release of the Fed’s preferred inflation gauge, the PCE deflator, could further shape rate expectations.
In Europe, a raft of economic indicators will provide insight into the region’s economic trajectory. Germany’s jobs data, France’s producer prices, and Spain’s consumer inflation figures are set for release, along with Switzerland’s GDP report. The European Central Bank (ECB) meets next week, with markets pricing in a quarter-point rate cut, followed by two more by September. However, policymakers remain divided, as inflation remains above target while economic growth continues to falter.
For now, global markets remain highly sensitive to developments in U.S. trade policy, with Trump’s tariff threats carrying significant implications for both European and U.S. economic prospects. Investors will be closely monitoring further announcements, as well as upcoming economic data, to gauge the likely direction of monetary policy and risk sentiment.
In Asian markets, Nvidia’s earnings barely registered, as tech stocks moved in different directions. Instead, attention was drawn to the latest developments on tariffs, with U.S. President Donald Trump’s shifting stance on trade sending mixed signals. While he extended the tariff deadline for Canada and Mexico to April 2, a White House official later suggested that the original March 4 deadline could still stand. Meanwhile, Trump confirmed that Europe is in his sights, proposing a 25% “reciprocal” tariff on automobiles and other goods, with further details expected soon.
This uncertainty has fueled market volatility, pushing U.S. bond yields and the dollar off recent lows. However, concerns about the health of the U.S. economy are growing. Treasury Secretary Scott Bessent warned that conditions are “brittle beneath” the surface, reinforcing a growing view that the Federal Reserve may need to ease policy sooner than previously expected. Traders now anticipate two rate cuts in 2025, with the first likely in July and a second as early as October, according to LSEG data.
Thursday’s U.S. GDP data and durable goods orders will be closely watched for further signs of economic weakness, while Friday’s release of the Fed’s preferred inflation gauge, the PCE deflator, could further shape rate expectations.
In Europe, a raft of economic indicators will provide insight into the region’s economic trajectory. Germany’s jobs data, France’s producer prices, and Spain’s consumer inflation figures are set for release, along with Switzerland’s GDP report. The European Central Bank (ECB) meets next week, with markets pricing in a quarter-point rate cut, followed by two more by September. However, policymakers remain divided, as inflation remains above target while economic growth continues to falter.
For now, global markets remain highly sensitive to developments in U.S. trade policy, with Trump’s tariff threats carrying significant implications for both European and U.S. economic prospects. Investors will be closely monitoring further announcements, as well as upcoming economic data, to gauge the likely direction of monetary policy and risk sentiment.