Markets Relieved After Tariff Delay
The week’s closing session unfolded under the expectation of potential “reciprocal tariffs” from the United States, which ultimately will not be implemented immediately. This decision eased initial market jitters and led to a weaker dollar, as fears of an escalating trade war subsided—for now.
The U.S. outlook was also shaped by weaker-than-expected consumption data: January retail sales fell 0.9%, significantly below estimates, suggesting a weaker household spending impulse. At the same time, industrial production exceeded expectations with a 0.5% increase, but manufacturing within that indicator declined by 0.1%. These mixed data, coupled with the tariff delay, put downward pressure on the dollar, which lost much of the ground it had gained in previous weeks.
The effects of this softening U.S. currency were felt across several emerging markets. The Mexican peso posted notable gains, while the Chilean peso advanced up to 0.7% at its peak.
In the stock market, signals regarding U.S. consumption and caution over potential tariffs translated into volatile trading on Wall Street, where the S&P 500 remained flat after mixed sector performances. Energy and financials held relatively firm, while consumer staples declined amid a more cautious investor outlook. Meanwhile, the Nasdaq 100 logged another week of gains, driven by strong tech earnings.
Europe maintained its recent positive trend, though some of its major indices—such as the DAX and Euro Stoxx 50—showed overbought signals (RSI above 70). In the most recent session, moderate profit-taking was observed in the DAX, while the French CAC 40 managed to hold its gains, supported by strong luxury sector earnings and other better-than-expected corporate results. Investors also remained in wait-and-see mode regarding potential U.S. trade measures impacting the region and the European Central Bank's monetary policy outlook.
In Asia, Hong Kong’s Hang Seng Index stood out with a more than 2% daily gain and over 6% for the week. Investors reacted optimistically to the prospect of the People’s Bank of China implementing new monetary stimulus to reinforce economic recovery. Additionally, strong demand for tech and consumer stocks helped fuel the rally.
The commodities market showed divergent movements. On one hand, oil prices remained in a tight range, with WTI hovering around $71 after a brief rally that was capped by the prospect of a diplomatic agreement that could ease energy sector sanctions. In contrast, natural gas surged nearly 9% over the week, reflecting seasonal volatility and some unexpected demand factors. In metals, gold retreated from record highs but remained above $2,900 per ounce.
Looking ahead, market attention will be focused on potential concrete announcements regarding the White House’s reciprocal tariffs. This will help shape the market outlook, which for now appears cautiously optimistic following developments in trade tensions but remains closely monitoring key macroeconomic indicators and potential shifts in U.S. trade policy.
Pepperstone doesn’t represent that the material provided here is accurate, current or complete, and therefore shouldn’t be relied upon as such. The information, whether from a third party or not, isn’t to be considered as a recommendation; or an offer to buy or sell; or the solicitation of an offer to buy or sell any security, financial product or instrument; or to participate in any particular trading strategy. It does not take into account readers’ financial situation or investment objectives. We advise any readers of this content to seek their own advice. Without the approval of Pepperstone, reproduction or redistribution of this information isn’t permitted.
The U.S. outlook was also shaped by weaker-than-expected consumption data: January retail sales fell 0.9%, significantly below estimates, suggesting a weaker household spending impulse. At the same time, industrial production exceeded expectations with a 0.5% increase, but manufacturing within that indicator declined by 0.1%. These mixed data, coupled with the tariff delay, put downward pressure on the dollar, which lost much of the ground it had gained in previous weeks.
The effects of this softening U.S. currency were felt across several emerging markets. The Mexican peso posted notable gains, while the Chilean peso advanced up to 0.7% at its peak.
In the stock market, signals regarding U.S. consumption and caution over potential tariffs translated into volatile trading on Wall Street, where the S&P 500 remained flat after mixed sector performances. Energy and financials held relatively firm, while consumer staples declined amid a more cautious investor outlook. Meanwhile, the Nasdaq 100 logged another week of gains, driven by strong tech earnings.
Europe maintained its recent positive trend, though some of its major indices—such as the DAX and Euro Stoxx 50—showed overbought signals (RSI above 70). In the most recent session, moderate profit-taking was observed in the DAX, while the French CAC 40 managed to hold its gains, supported by strong luxury sector earnings and other better-than-expected corporate results. Investors also remained in wait-and-see mode regarding potential U.S. trade measures impacting the region and the European Central Bank's monetary policy outlook.
In Asia, Hong Kong’s Hang Seng Index stood out with a more than 2% daily gain and over 6% for the week. Investors reacted optimistically to the prospect of the People’s Bank of China implementing new monetary stimulus to reinforce economic recovery. Additionally, strong demand for tech and consumer stocks helped fuel the rally.
The commodities market showed divergent movements. On one hand, oil prices remained in a tight range, with WTI hovering around $71 after a brief rally that was capped by the prospect of a diplomatic agreement that could ease energy sector sanctions. In contrast, natural gas surged nearly 9% over the week, reflecting seasonal volatility and some unexpected demand factors. In metals, gold retreated from record highs but remained above $2,900 per ounce.
Looking ahead, market attention will be focused on potential concrete announcements regarding the White House’s reciprocal tariffs. This will help shape the market outlook, which for now appears cautiously optimistic following developments in trade tensions but remains closely monitoring key macroeconomic indicators and potential shifts in U.S. trade policy.
Pepperstone doesn’t represent that the material provided here is accurate, current or complete, and therefore shouldn’t be relied upon as such. The information, whether from a third party or not, isn’t to be considered as a recommendation; or an offer to buy or sell; or the solicitation of an offer to buy or sell any security, financial product or instrument; or to participate in any particular trading strategy. It does not take into account readers’ financial situation or investment objectives. We advise any readers of this content to seek their own advice. Without the approval of Pepperstone, reproduction or redistribution of this information isn’t permitted.
Global risk Warning CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89% of retail investor accounts lose money when trading in CFDs. You should consider whether you understand how CFD
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Global risk Warning CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89% of retail investor accounts lose money when trading in CFDs. You should consider whether you understand how CFD
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.