Market News 5 MAR
Trade War: A New Round of Escalation
On Tuesday, major U.S. stock indices closed lower:
S&P 500 declined by -1.22%
Dow Jones lost -1.55%
Nasdaq 100 fell by -0.36%
Futures on stock indices also showed mixed movements: March contracts on S&P 500 (ESH25) dropped by -0.77%, while futures on Nasdaq 100 (NQH25) rose by +0.12%.
The main pressure on the stock market stemmed from escalating trade conflicts. The introduction of new U.S. tariffs on goods from Canada, Mexico, and China triggered retaliatory measures from these countries. Additionally, comments from the president of the Federal Reserve Bank of New York heightened concerns about inflation and economic uncertainty.
The U.S. imposed new tariffs on imports, prompting countermeasures:
Canada announced 25% tariffs on U.S. goods worth CAD 30 billion, effective immediately, with additional restrictions worth CAD 125 billion set to follow in three weeks.
China imposed 15% tariffs on U.S. agricultural products and banned trade with certain American defense companies.
These measures are putting pressure on international trade and could negatively impact global economic growth.
Market Focus on Macroeconomic Data
Investors are awaiting the release of key economic reports:
On Wednesday, the ISM Services Index is expected to decline to 52.7.
On Friday, non-farm payroll data is projected to show an increase of +160,000 jobs.
Average hourly earnings are anticipated to remain at +4.1% YoY.
Also on Friday, Federal Reserve Chairman Jerome Powell will deliver a speech on economic outlook.
Additionally, the market currently estimates a 7% probability of a rate cut at the upcoming FOMC meeting (March 18–19).
Global Stock Markets
International markets experienced high volatility:
Euro Stoxx 50 fell by -2.77%, hitting a 2.5-week low.
Shanghai Composite rebounded by +0.22% after a three-week low.
Nikkei 225 dropped by -1.20%, reaching its lowest level in 5.5 months.
Meanwhile, the yield on U.S. 10-year Treasury bonds rose by 4.9 basis points to 4.204%, indicating reduced demand for safe-haven assets.
Stock Market Reaction: Sectors and Individual Stocks
On Tuesday, the following sectors were under pressure:
Banking sector: Shares of Citigroup (-6%), Bank of America (-6%), Morgan Stanley (-5%), and other major financial institutions suffered losses.
Tourism sector: Stocks of Royal Caribbean (-5%), Carnival (-5%), Delta Airlines (-5%) also declined amid concerns about global slowdown.
Tesla (-3%): A 49% YoY drop in deliveries to China negatively affected the company’s stock.
However, certain sectors saw gains:
Chipmakers: Marvell (+2%), AMD (+2%), Nvidia (+1%), ASML (+1%).
Pharmaceuticals: Walgreens Boots Alliance (+5%) on speculation about a potential acquisition.
Tech sector: Okta (+25%) due to strong quarterly earnings.
The stock market remains under pressure from geopolitical and economic factors. Rising trade tensions between the U.S. and key partners could negatively impact corporate earnings and economic growth prospects.
Key events for the upcoming week:
U.S. President’s speech before Congress.
Release of labor market and inflation data.
Investor expectations regarding Federal Reserve actions.
The market remains highly sensitive to trade negotiation news, macroeconomic data, and Federal Reserve comments. In the short term, investors should monitor bond yields and major indices to determine future market direction.