Source: Wall Street Journal.

As April 2 approaches, the US market is nervously awaiting the implementation of new tariff policies. On Thursday, Trump once again waved the tariff stick, and his statements regarding auto tariffs not only targeted traditional auto-exporting giants like the EU and Japan but also included a strong statement that "if Canada and the EU unite to fight back, tariffs will be further increased."

Amid concerns of escalating trade frictions, the Sector of Precious Metals collectively strengthened under a resonance of risk aversion and inflation expectations. Spot Gold broke through $3060 during the session, reaching a historic high, while Silver also surpassed $34. European and American stock markets continued to decline, with US stocks sharply dropping towards the end of the session, and all European and American automakers saw declines, with funds visibly flowing back to defensive assets. Investors' expectations of "trade conflict + imported inflation" are heating up, leading to an increase in long-term US Treasury yields and a steepening yield curve.

The US dollar fell instead of rising, nearly giving back all of the previous day's gains, while the British Pound and Euro led the rise. Due to escalating trade frictions between Canada and the US, the Canadian dollar came under pressure. The Premier of Ontario and the Canadian Finance Minister reached a consensus to not implement retaliatory measures before April 2, placing the market in a state of "waiting for the US to act first." There are currently no new escalation signals from the Middle East or Ukraine, leading to a slight rise in oil prices.

The US still faces a situation of "strong hard data, weak soft sentiment." The final value of the fourth quarter GDP was revised up to 2.4%, slightly above the previously announced 2.3%. However, consumption expenditure, which accounts for two-thirds of GDP, was revised down from 4.2% to 4.0%. Considering the low consumption base in Q1 and the increase in uncertainty, the consumption side may face some pressure. The core PCE price index was revised down to 2.6%, reflecting a slowdown in price growth.

As of the week ending March 22, the number of initial jobless claims in the US was 0.224 million, nearly unchanged from the previous value, with the four-week average slightly falling and continuing claims lower than expected. Analysis indicates that several recent hiring and layoff indicators are beginning to worsen, suggesting that jobless claims may rise in the coming weeks. The number of pending home sales in February increased by 2% month-on-month, exceeding expectations and reversing January's 4.6% decline. The chief economist of NAR stated that although February's contract data rebounded, the overall situation remains weak, and if mortgage rates show a significant decline, demand and supply in the housing market could benefit.

Regarding the Federal Reserve, Richmond Fed President Barkin stated that the Federal Reserve is waiting for uncertainties to settle before deciding on actions. The market is focused on the upcoming February PCE inflation data and the final consumer confidence index from the University of Michigan to be released this Friday. Federal Reserve Chairman Powell previously hinted that the year-on-year PCE inflation might be 2.5%, with core PCE potentially rising to 2.8%. If the data continues to be strong, it could delay the market's expectations for rate cuts.

Trump's tariff remarks triggered a flight to safety, and while US stocks narrowed their earlier drops, selling pressure clearly intensified in the closing hours. Funds flowed into domestic demand and defensive sectors, with Energy and Communications Services sectors leading the decline, while Consumer Discretionary and Consumer Staples sectors remained relatively strong:

The three major indexes in the USA experienced widespread declines.

• The S&P 500 Index closed down 0.33%. The Dow Jones Industrial Average closed down 0.37%. The Nasdaq closed down 0.53%. The Nasdaq 100 closed down 0.59%.

• The Nasdaq Technology Market Capitalization Weighted Index (NDXTMC), which measures the performance of Nasdaq 100 technology stocks, closed down 1.43%.

• The Russell 2000 Small Cap Index closed down 0.39%. The VIX, or fear index, closed up 1.96%, at 18.69.

  
  

US industry ETFs mostly declined with few exceptions.

• Global Airlines industry ETF closed down 2.37%, the Semiconductors ETF down 1.92%, and the Energy industry ETF down 0.97%.

• The Consumer Discretionary ETF rose by less than 0.1%, while the Consumer Staples ETF increased by 1.14%.

• Among the 11 sectors of the S&P 500 Index, the Energy sector fell by 0.85%, the Telecommunications sector fell by 0.84%, and the Information Technology/Technology sector fell by 0.75%.

The "Tech Seven Sisters" had mixed results:

• The Magnificent 7 Index fell by about 0.4%, while the "losers from Trump's tariffs" Index dropped by about 0.15%.

• Apple rose by 1.05%, Tesla increased by 0.39%, Microsoft gained 0.16%, and Amazon saw an increase of 0.11%.

• Meta fell by 1.37%, Google A dropped by 1.71%, and NVIDIA decreased by 2.05%.

Chip stocks faced a general decline.

• The PHLX Semiconductor Index fell by 2.07%. NVIDIA's double leveraged ETF dropped by 4.08%.

• AMD fell by 3.21%, and Jefferies downgraded AMD's rating to Hold with a Target Price of 120 USD, citing limited progress in AI and increasing competitive pressure.

• Broadcom fell by 4.06%, and Taiwan Semiconductor ADR fell by 3.03%.

AI concept stocks generally declined.

• BullFrog AI decreased by 4.74%, Palantir fell by 2.37%, and Super Micro Computer dropped by 6.26%.

• Applovin fell by 20.12%, with short-sellers Muddy Waters stating they are shorting the company.

Most China Concept Stocks are up.

• The Nasdaq Golden Dragon China Index closed up by 1.39%. The FTSE A50 Futures Index closed up by 0.32% in the overnight session.

• Among ETFs, the FTSE China 3x Long ETF (YINN) increased by 3.81%, the China Concept Internet Index ETF (KWEB) rose by 2.29%, and the China Technology Index ETF (CQQQ) climbed by 1.46%.

• Among popular China Concept Stocks, MENGNIU DAIRY ADR rose by 5.68%, Fangdd Network increased by 4.35%, and Alibaba gained 2.56%.

• NIO closed down 5.69%, as the company announced plans to place shares at a price of HKD 29.46 per share, issuing no more than 0.11879 billion Class A ordinary shares.

Gold has reached a historic high again, and gold mining stocks have generally increased.

• Gold and silver mining stocks generally rose, with Avino Silver up 8.89%, Coeur Mining up 3.26%, and gold mining stock ETFs up 2.44%.

• Copper mining stocks had mixed results, with Freeport down 3.64%, the US Copper Index ETF down 2.41%, and Copper ETFs down 2.02%.

The automotive sector generally fell.

• The Bloomberg Electric Vehicle Price Return Index fell 0.37%, Volvo AB Unsponsored ADR Class B closed down 7.57%, General Motors fell 7.36%, ZEEKR ADR fell 3.76%, and Porsche P911 fell 2.62%.

• Tesla surged over 7% during the day but ultimately closed up 0.39%, while 'Tesla's rival' Rivian rose 7.6%.

Aviation stocks generally fell.

• United Airlines fell by 5.57%, Delta Air Lines dropped by 3.99%, American Airlines (AAL) declined by 2.62%, and Southwest Airlines went down by 1.34%, while Boeing rose by 0.31%.

Other key stocks include.

• Jefferies fell by 9.85%, marking the biggest drop since January, as the company's first-quarter net income did not meet expectations.

• GameStop (GME) dropped by 22.11% as the company issued bonds to purchase Bitcoin.

• French gaming company Ubisoft ADR (UBSFY) rose by 13.62% and announced the establishment of a new subsidiary, with Tencent investing 1.16 billion euros.

• Berkshire Hathaway's Class B shares, under Warren Buffett, rose by 0.25%, closing at $534.52 and continuing to set a record high.

Trump's tariff policy has heavily impacted European car manufacturers, with the European Auto Index falling nearly 1%. On the stock side, UK retail giant Next surged by 10.5% after reporting annual profits exceeding 1 billion British Pounds for the first time, while the entire European retail sector rose by 2%.

European stocks:

• The pan-European STOXX 600 Index closed down 0.44%. The Eurozone STOXX 50 Index closed down 0.57%.

• The German stock index closed down 0.70%. The French stock index closed down 0.51%, the Italian stock index closed up 0.10%, and the British stock index closed down 0.27%. The Spanish stock index fell 0.07%.

• U.S. President Trump announced automobile tariffs on March 26, causing a general decline in the European automotive sector. Valeo Group fell by 7.76%, and Aston Martin dropped by 6.66%.

• Ferrari rose more than 1.8%. In response to the tariff impact, Ferrari plans to increase the prices of some cars in the U.S. market by up to 10%.

U.S. Treasuries on the long end faced pressure, with medium to long-term U.S. Treasury yields rising by at least more than 1 basis point. Among them, the 30-year Treasury yield rose by 3 basis points, and the 2-year yield fell by 2 basis points, pushing the yield curve (2s30s) to its steepest level since March 2022:

US Treasury:

• The 10-year benchmark U.S. Treasury yield rose by 1.35 basis points to 4.3654%.

• The 2-year U.S. Treasury yield fell by 2.26 basis points to 3.9940%.

• The US Treasury issued $44 billion in 7-year Bonds that performed worse than expected. In the short-term Treasury bills, the auction rates for the 4-week and 8-week US Treasury were 4.220% and 4.245% respectively, both receiving 3.14 times the bids.

European bonds:

• At the end of European trading, the German 10-Year Treasury Notes Yield fell by 2.2 basis points, reported at 2.733%. The 2-Year German Bond Yield fell by 5.1 basis points.

• The UK 10-Year Treasury Notes Yield rose by 5.5 basis points. The 2-Year British Bond Yield fell by 1.7 basis points.

• The France 10-Year Treasury Notes Yield fell by 2.5 basis points. The Italy 10-Year Treasury Notes Yield fell by 2.1 basis points.

The euro halted a six-day decline and rebounded, with the USD against the yen nearing this year's high. The Bank of Mexico cut interest rates by 50 basis points as expected, and the Mexican peso experienced significant declines. The offshore yuan strengthened slightly:

USD:

• In late New York trading, the ICE USD fell by 0.25%, reported at 104.286 points.

• The Bloomberg Dollar Index fell by 0.05% to 1273.40 points.

• Offshore Renminbi:

• In the New York late trading session, the offshore RMB (CNH) against the USD was reported at 7.2680 yuan at 04:59 Beijing time, up 116 pips from Wednesday's New York closing, marking the first rebound in the last eight trading days, with overall trading during the day in the range of 7.2819-7.2656 yuan.

Cryptos:

• In the New York late trading session, the largest market cap leader Bitcoin rose by 0.55% to 87005.00 USD.

• The second largest, Ethereum, rose by 0.25% to 2004.00 USD in the late trading session.

A significant decrease in US inventories supports rising oil prices, reaching a new high since February, but Trump's tariffs suppress demand expectations, leading to continued increases in oil prices with weakening momentum.

WTI:

• WTI May Crude Oil Futures rose by $0.27, an increase of nearly 0.39%, closing at $69.92 per barrel.

• India's largest refiner has stopped importing Venezuelan crude oil. According to the US Energy Information Administration (EIA), as of last week, US crude oil inventories decreased by 3.3 million barrels, far exceeding the market expectation of a 0.96 million barrel decline.

• Suvro Sarkar, head of energy research at DBS Bank in Singapore, stated: "Due to the uncertainty of US policy, coupled with the potential tariff wars that may suppress demand, we expect oil prices are unlikely to return to the highs seen in early 2025."

Brent Oil:

• Brent May Crude Oil Futures rose by $0.24, an increase of over 0.32%, closing at $74.03 per barrel.

Natural Gas:

• US April Natural Gas Futures rose by more than 2.30%, closing at $3.9500 per million British thermal units.

• TTF benchmark Dutch Natural Gas Futures rose by 1.10%, closing at €41.200 per megawatt hour.

• ICE UK Natural Gas Futures rose by 0.43%, reported at 99.430 pence per therm.

Benefiting from safe-haven sentiment and structural buying support. Spot gold strongly broke through the $3,060 per ounce mark, reaching a historical high. As safe-haven sentiment heats up, the Precious Metals sector overall strengthened, with Silver breaking the $34 barrier simultaneously.

Gold:

• COMEX Gold Futures rose by 1.53%, reported at $3,068.60 per ounce, and reached $3,071.30 at 23:36, setting a historical high.

• COMEX Gold Futures June contract rose by 1.51%, reported at $3,098.50, and refreshed the intraday historical high to $3,102.20 at 23:36.

• Spot gold rose by 1.23% in the last trading session, reported at $3,056.54 per ounce, and refreshed the historical high at $3,059.63 at 22:50 Beijing time.

• The price ratio of Gold to Silver is also falling back to the year's low range, indicating that gold's position as a 'comprehensive inflation hedge asset' has been elevated again.

Silver:

• COMEX Silver Futures rose by 2.26%, reported at 34.205 USD/ounce.

• Spot Silver rose by 2.27% at the close, reported at $34.3958 per ounce.

London Industrial Metals experienced mixed trading:

• LME Copper futures fell by $80, reported at $9,846 per ton.

• COMEX Copper futures dropped by 2.29%, reported at $5.1225 per pound, moving away from the intraday historical high of $5.3740 set on March 26.

• LME Aluminum futures fell by $44. LME Zinc futures fell by $56. LME Lead futures fell by $50.

• LME Nickel futures rose by $2. LME Tin futures rose by $199. LME Cobalt futures rose by $235.

Editor/jayden