- Asian Shares Advance After Trump Delays Tariffs: Markets Wrap
Asian shares climbed after President Donald Trump delayed tariffs on Mexico and Canada for a month, and
said he’d hold further talks with China. Stocks in Hong Kong, Australia and Japan gained and US futures rose
after the S&P 500 on Monday trimmed most of its slide that earlier approached 2%. Dollar gained against G
10 currencies and oil dropped. The delays helped reverse Monday’s risk-off market sentiment and investors
are turning their focus on how a planned call between the US and China pans out. The delay with Mexico and
Canada bolsters the view that Trump sees tariffs as a negotiating ploy — but is still reluctant to inflict
economic pain on Americans. - Dow rebounds from steep decline to finish with 100-point loss after Trump pauses tariffs on Mexico
The Dow Jones Industrial Average on Monday staged a major comeback, recovering steep losses from earlier
in the session after President Donald Trump said tariffs against Mexico would be paused for one month. The
30-stock average ended the day down 122.75 points, or 0.28%, to close at 44,421.91. At its lows of the day,
the Dow was down 665.6 points, or 1.5%. The S&P 500 slid 0.76% to 5,994.57, and the Nasdaq Composite
slumped 1.2% to 19,391.96. The iShares MSCI Mexico ETF (EWW), which tracks Mexican stocks, rebounded to
close more than 2% higher. - Oil prices close at 1-month low as US pauses tariffs on Mexico
Oil prices edged up in volatile trade on Monday but closed at a one-month low on the expiration of a higher
priced contract, as the market digested U.S. President Donald Trump’s planned imposition of tariffs on
Canada, Mexico and China. Concerns over imports from two of the main crude suppliers to the U.S. boosted
prices by over $1 a barrel earlier in the session before Trump paused the new tariffs on Mexico for one
month as Mexico agreed to reinforce its northern border to stem the flow of illegal drugs, particularly
fentanyl. Brent crude futures for April delivery rose 29 cents, or 0.4%, from where that contract closed on
Friday to settle at $75.96 a barrel, while U.S. West Texas Intermediate crude futures (WTI) rose 63 cents, or
0.9%, to settle at $73.16. - Gold hits record high as Trump tariffs spur safe-haven buying
Gold prices hit an all-time high on Monday, bolstered by safe-haven inflows after U.S. President Donald
Trump’s tariffs on Canada, China and Mexico added to concerns of inflation that would dent economic
growth. Spot gold rose 0.8% to $2,818.99 per ounce, after hitting a record of $2,830.49 earlier in the session.
U.S. gold futures settled 0.8% higher at $2,857.10. Despite the usual dampening effect of a strong dollar on
the gold market, prices have been rallying due to the safe-haven demand driven by uncertainty surrounding
Trump’s tariffs, said David Meger, director of metals trading at High Ridge Futures. The 25% tariffs imposed
by Trump on Canadian and Mexican imports from Tuesday, along with a 10% charge on Chinese goods,
fuelled fears of a trade war that could slow global growth and feed inflation. - President Trump’s Canada, Mexico border deals avert trade war for now
President Donald Trump agreed to delay 25 per cent tariffs on Canada and Mexico for a month after both US
neighbours agreed to take tougher measures to combat migration and drug trafficking at the border, warding
off a continental trade war for now. Trump and Canadian Prime Minister Justin Trudeau announced their
agreement Monday in separate social media posts, just hours before the two countries were due to begin
placing tariff on hundreds of billions of dollars of each other’s exports. The US received a number of
concessions from the Canadian government. Canada is appointing a new fentanyl czar, will list cartels as
terrorists and join the US in creating a new “strike force” to fight organized crime, drug trafficking and money
laundering, Trudeau said in a post on X. Trudeau said he has also signed a new “intelligence directive” on
organised crime and fentanyl. Canada is going ahead with a C$1.3 billion ($901 million) plan it announced in
December to add more border security resources, including helicopters, the prime minister said. Trump
declared victory while hinting that tough negotiations are still ahead. “I am very pleased with this initial
outcome, and the Tariffs announced on Saturday will be paused for a 30 day period to see whether or not a
final Economic deal with Canada can be structured,” said the president, who has taken aim at the US trade
deficit with Canada. - Euro zone inflation rises to hotter-than-expected 2.5% in January on energy price hike
The euro zone inflation accelerated to a hotter-than-expected 2.5% in January on an annual basis as energy
costs jumped, flash data from statistics agency Eurostat showed Monday. Economists polled by Reuters had
expected the January inflation print to come in at 2.4%, unchanged from December. So-called core inflation,
which strips out food, energy, alcohol and tobacco prices, came in at 2.7% in January and has remained
unchanged since September. The closely watched services inflation print meanwhile inched lower to 3.9% in
January from 4% in December. Energy costs however jumped, rising 1.8% from a year earlier. This was up
sharply from December’s 0.1% increase. Both energy prices and core inflation came in higher than
anticipated, while the dip in services inflation was smaller than hoped for, Jack Allen-Reynolds, deputy chief
euro zone economist at Capital Economics said in a note on Monday. “Services inflation has been stuck
around 4% for over a year,” he pointed out, noting that it was difficult to predict when it would ease.
Headline inflation in the euro zone hit a low of 1.7% in September, but has since re-accelerated as base
effects from lower energy prices have faded. The European Central Bank last week said disinflation “is well on
track.” “Inflation has continued to develop broadly in line with the staff projections and is set to return to the
Governing Council’s 2% medium-term target in the course of this year,” the bank added. “Most measures of
underlying inflation suggest that inflation will settle at around the target on a sustained basis.” The ECB on
Thursday cut interest rates by 25 basis points, bringing the key deposit facility rate to 2.75%. Further rate
reductions are expected from the ECB throughout the year. - Trump tariffs could create a new challenge for Chinese policymakers: A growth rate below 5%
The imminent U.S. tariffs are likely to deal a significant blow to China’s already-faltering economy, reinforcing
calls for more forceful stimulus measures to bolster the country’s growth. U.S. President Donald Trump on
Saturday followed through on a threat made after his presidential victory, imposing 10% tariffs on Chinese
goods, starting Tuesday, over Beijing’s alleged failure to prevent the flow of fentanyl into the U.S. The blanket
10% tariffs will be levied on top of the existing tariffs of up to 25% that Trump had imposed on Chinese goods
during his first presidency. The additional 10% tariffs would reduce China’s real GDP growth by 50 basis
points this year, economists at Goldman Sachs said in a report Monday. The investment bank expects China’s
real GDP growth to slow to 4.5% this year while domestic price growth remains under pressure due to weak
demand, with consumer inflation expected to rise just 0.4% in 2025. The consumer price inflation barely grew
last year, rising 0.2% year on year. Higher U.S. tariffs could further strain domestic prices as external demand
for Chinese goods weaken. As Trump started his second term, he ordered his administration to investigate
Beijing’s compliance with a trade deal struck during his first presidency in 2020. The final result of the
assessment will be delivered to Trump by April 1, potentially setting the stage for further tariff actions,
economists said. - Trump pauses Mexico tariffs for one month after agreement on border troops
President Donald Trump paused for a month new 25% tariffs on goods entering the United States from
Mexico. Mexican President Claudia Sheinbaum agreed to immediately send 10,000 soldiers to her country’s
border to prevent the trafficking of fentanyl and other drugs. The announcement came two days after Trump
slapped 25% tariffs on goods from Mexico and Canada, as well as a 10% tariff on goods imported from China.
Trump said there will be Mexican officials, Secretary of State Marco Rubio, Secretary of Treasury Scott
Bessent, and Secretary of Commerce Howard Lutnick will negotiate on tariffs. - Trump signs order establishing a sovereign wealth fund that he says could buy TikTok
President Donald Trump on Monday signed an executive order that outlines plans for a government-run
sovereign wealth fund to serve as an economic development tool and perhaps be used to buy TikTok. Among
the aims for the fund would be developing infrastructure such as airports and highways, and it could help the
U.S. extend its influence in areas such as Panama and Greenland. “We’re going to stand this thing up within
the next 12 months. We’re going to monetize the asset side of the U.S. balance sheet for the American
people,” U.S. Treasury Secretary Scott Bessent said during a media parley. “There’ll be a combination of
liquid assets, assets that we have in this country as we work to bring them out for the American people.”
There were no other details for a fund Trump said during his campaign could back “great national
endeavors.” He has said tariffs could help provide funding. Other nations use taxes on natural resources,
financial transactions and carbon use as funding mechanisms. A discussed deal in which the U.S. would
become a partner in social media platform TikTok would be one potential use, Trump said. The app was taken
offline briefly amid security concerns, but Trump signed an order allowing it back for a 75-day period during
which it likely will have to divest itself of Chinese interests. Though the idea of such a U.S. fund has been
brought up before, the vehicles are generally used by smaller nations with vast natural resources as well as
fiscal surpluses to deploy — unlike the U.S., which has been running massive budget deficits. Nations with the
funds include China, Norway and Singapore. A U.S. fund could help it compete with those countries and
might make the government less dependent on issuing Treasury debt to raise money. - European stocks most exposed to tariffs, such as automakers, fell on Monday. Trump also reiterated a
warning to the European Union that tariffs “will definitely happen,” citing a large trade deficit with the
bloc
Members of the Stoxx 600 Index generate only 40% of their revenues within the EU, with 26% coming from
North America. Tariffs of 10% on European goods would shave between 1% and 2% off earnings per share,
according to estimates from Citigroup. In Europe, Mexico-exposed stocks have come under pressure, with
BBVA -2.6% and Santander -2.5% among Monday’s worst-performing banks. Mexico is Spanish bank BBVA’s
largest market, with around 40% net revenue exposure. Peer Santander has around 10% exposure. Oddo BHF
says the North America tariffs are set to have “major consequences” for the auto sector. Analysts say based
on simulations, Trump’s orders mean $1300bn of trade will be affected, or 43% of US imports; expect the
price of vehicles sold in the US to increase significantly due to supply chains, and companies’ inability to
absorb the shock for now, especially auto suppliers. - Julius Baer shares tumbled 12.7% after the Swiss wealth manager announced job cuts and a
governance revamp but left analysts waiting for a more detailed plan to boost growth
New Chief Executive Officer Stefan Bollinger announced at his first results presentation that the executive
board is being cut to five members from 15, and the bank will seek an additional 110 million Swiss francs
($120 million) in annual cost savings. That will translate to about 400 jobs in Switzerland, equivalent to about
5% of the workforce, deputy CEO Nic Dreckmann said. Pre-tax income for 2024 missed estimates but client
inflows came in better than expected. Analysts noted the mixed results, as well as a lack of detail yet on the
bank’s plan to grow its business. Annual profit for 2024 increased to 1.02 billion Swiss francs, more than
double the 2023 amount which was impacted by losses linked to the Signa bankruptcy. Assets under
management grew 16% to 497 billion francs. Analysts at KBW said the results were “underwhelming.” The
bank’s gross margin came in at 83 basis points, lower than the 2023 level. The bank didn’t give any further
details on a mooted buyback plan, and said it would present a strategy update, including new medium-term
targets, ahead of the summer. - Palantir Technologies shares surged 22.6% afterhours, after giving a full-year revenue forecast that
exceeded analysts’ estimates, thanks to what Chief Executive Officer Alex Karp described as “untamed
organic growth” in demand for its artificial intelligence software
Sales will be about $3.75 billion in 2025, the company said. Adjusted operating income will be about $1.56
billion. Analysts, on average, projected revenue of $3.54 billion and operating profit of $1.37 billion. Best
known for its national security work, and more recently its AI platform, Palantir’s stock surged 340% in 2024.
The company rode a wave of investor excitement for AI, and more commercial and government customers
started using Palantir’s data analysis software. Fourth-quarter revenue jumped 36% to $827.5 million,
compared with analysts’ average estimate of $775.9 million. Profit, excluding some items, was 14 cents a
share. Analysts, on average, estimated 11 cents. As the company deepens its connection with the US Defense
Department, sales to the US government jumped 45% to $343 million. US commercial revenue gained 64% to
$214 million in the period ended Dec. 31. Palantir projected US commercial sales in 2025 will rise about 54%
to $1.08 billion. - Nvidia stock falls as Trump’s tariffs send shockwaves across the market
Nvidia (NVDA) stock dropped as much as 5% in early trading Monday, extending the prior week’s declines as
investors reacted to Trump’s new tariffs. US president Donald Trump on Saturday announced an additional
tariff of 10% on imports from China and 25% on those from Mexico and Canada to the apparent surprise of
investors, who had underpriced such risk. The tech-heavy Nasdaq (^IXIC) was off more than 2% Monday
morning. Nvidia stock pared losses and ended the day down 2.8%. Nvidia’s stock was already reeling from
the news last week that the Trump administration was considering further tightening rules on exports of
Nvidia chips to China. Bloomberg, citing unnamed sources, said the administration officials were in the early
stages of discussions to expand restrictions on exports of Nvidia’s H20 chips, a version of its Hopper AI chips
designed specifically for China to comply with US export rules. Some 17% of Nvidia’s 2024 sales came from
China. The report came after a new AI model released by Chinese firm DeepSeek called into question the
mammoth spending from Big Tech on artificial intelligence infrastructure, sparking a massive sell-off in the
tech sector. Nvidia fell 17% in a single day on the news, shaving $589 billion off the AI chipmaker’s market
cap — the largest single-day loss in stock market history. While semiconductors aren’t directly affected by
the new tariffs, Bernstein analyst Stacy Rasgon wrote in a Monday research note that the duties would affect
imports of data processing equipment, such as servers using AI chips. Higher prices of those products could
reduce demand and have an indirect effect on chip sales. Rasgon pointed to the fact that the US imported
$39 billion worth of data processing equipment, such as PCs and servers from China in 2023 and $28 billion
from Mexico. Contract manufacturer Foxconn is building the world’s largest factory for assembling servers
with Nvidia’s Blackwell AI chips in Mexico. - Tesla shares drop 5% on Trump tariffs, decline in vehicle registrations in Europe
Tesla shares declined about 5% on Monday to close at $383.68 after President Donald Trump announced
plans for extensive tariffs on goods from Canada, Mexico and China. The stock was also hit by declining
registrations for Tesla vehicles in France, Sweden and Norway. Tesla fell more than its megacap peers, with
Apple’s stock suffering the next-biggest drop at more than 3%. President Donald Trump over the weekend
slapped 10% tariffs on goods imported from China, where Tesla produces about half its automobiles. While
the tariffs are sure to hit all automakers’ supply chains, Tesla operates factories in the U.S., Berlin and
Shanghai, enabling it to sidestep some of the challenges faced by other electric vehicle makers. During
Tesla’s earnings call last week, Chief Financial Officer Vaibhav Taneja said the company’s profitability could
take a hit if the new administration implements tariffs. “Over the years, we’ve tried to localize our supply
chain in every market, but we are still reliant on parts from across the world for all our businesses,” Taneja
said. He said the “imposition of tariffs” would “have an impact on our business and profitability.” As for
falling registrations in Europe, the drop was steepest in France, one of the continent’s largest EV markets.
Tesla registrations there fell 63% in January from the same month a year earlier, according to data tracked
by industry association PFA, or Plateforme Automobile. That was a much steeper drop than the decline in
electric cars and in overall automotive sales in France. In Sweden and Norway, Tesla sales for January fell 44%
and 38%, respectively, Reuters reported. In addition to the tariffs and news about declining registrations,
Tesla over the weekend also cut lease prices for its base Model 3 sedan and unpainted steel Cybertruck
vehicles, according to listings for customers in the U.S. viewed by CNBC. - Apple shares fall on concern Trump tariffs on China will hit profit
Apple shares fell more than 3% on Monday after President Donald Trump announced 10% tariffs on China,
where the company assembles the majority of its products. Apple’s decline was steeper than all of the tech
megacaps, other than Tesla, and shows how vulnerable the iPhone manufacturer could be to increased
import costs. While Apple faced tariffs during the first Trump administration, the company was largely able to
avoid fees by securing waivers for its specific products. It also expanded its supply chain to do some assembly
in countries such as Vietnam, Malaysia and India. But Apple remains reliant on Chinese production.
Apple declined to comment on the tariffs. They go into effect on Tuesday. “Apple being included in China
tariffs is contrary to our expectations,” wrote Rosenblatt analyst Barton Crockett in a note on Monday.
Crockett wrote that he expects Apple to pass price increases to the consumer, a move that he said could
upset Trump. “We thought history would repeat. But that’s not the case right now,” Rosenblatt wrote.
Last week, Apple reported 4% revenue growth in the December quarter to $124 billion. However, the
company guided investors to expect merely “low to mid single digits” growth in the current quarter, and said
sales in China, Taiwan and Hong Kong declined 11% in the latest period. The ultimate effect of the tariffs on
Apple’s profit may depend on how much U.S. demand the company can fill from production locations outside
of China. If Apple can source 80% of U.S.-bound devices from outside of China and doesn’t raise prices, it
could hurt annual earnings by 5 cents per share, or less than 1%, according to a note on Monday from Bank
of America Securities analyst Wamsi Mohan. If half of U.S. Apple devices are from China, it would hurt
Apple’s full-year earnings by 12 cents, Mohan estimates. For the fiscal year ending in September, analysts
expect Apple to report earnings of $7.34, according to LSEG. “As the new tariff is imposed on imports from
China, Apple could have its manufacturing partners ramp up production in India and ship to the U.S.,” Mohan
wrote. “This could also be done for other Apple products that are manufactured in countries including
Vietnam, Malaysia, etc.” - Salesforce cutting 1,000 roles amid AI push
Salesforce Inc (NYSE:CRM) is cutting about 1,000 roles as its new fiscal year begins, Bloomberg reported
on Monday, although the firm is still hiring more sales personnel for its artificial intelligence products.
Over 1,000 roles will be affected, although displaced workers will be able to apply for other internal
positions, the Bloomberg report said, citing people with knowledge of the matter. The enterprise
software giant had trimmed about 1,000 roles in two separate cuts in 2024, with part of these cuts also
at the recently acquired But it had also reportedly hired over 1,000 new sales personnel to sell its new
AI products, specifically its generative AI agents. Salesforce has touted its AI agents as the next major
driver of sales in the coming quarters, and has aggressively promoted the technology, which is called
Agentforce. The company’s AI agents can act independently in completing some tasks, such as
answering basic customer questions and even evaluating potential sales opportunities. Salesforce has
about 72,000 employees across the world as of 2024. The company’s reshuffling of its employees comes
amid similar moves in the broader technology space, especially with the advent of gen AI over the past
two years. - Target is sued for defrauding shareholders about DEI
Target has been sued for allegedly concealing the risks of its diversity and social initiatives, leading to a
backlash that caused customers to flee and the stock price of the Minneapolis-based retailer to
plummet. In a proposed class action on Friday, shareholders led by the City of Riviera Beach Police
Pension Fund in Florida said Target defrauded them into paying inflated prices for its stock and
unknowingly supporting management’s “misuse of investor funds to serve political and social goals.”
The lawsuit said the retailer, CEO Brian Cornell and other officials failed to disclose the risk of consumer
boycotts stemming from Target’s Environmental, Social and Governance and Diversity, Equity and
Inclusion initiatives. It also said Target concealed backlash from its May 2023 Pride Month campaign,
which led the retailer to remove some LGBTQ-themed merchandise after in-store confrontations led
some employees to fear for their safety. Target’s share price fell 22% on Nov. 20, 2024, wiping out about
$15.7 billion of market value, after it forecast disappointing profit and holiday sales. Shareholders said
Target’s underperformance stood “in stark contrast” to results at rival Walmart (NYSE:WMT), and
reflected “continued backlash from its campaigns.” Target did not immediately respond on Monday to
requests for comment. The lawsuit in the Fort Myers, Florida federal court seeks damages for Target
shareholders from Aug. 26, 2022 to Nov. 19, 2024. It was filed after Target said on Jan. 24 it would end
DEI initiatives this year, including a program to support Black-owned businesses that it adopted
following the 2020 murder of George Floyd by a Minneapolis police officer. Target joined Walmart,
Amazon.com (NASDAQ:AMZN) and some other prominent companies to scale back such initiatives,
which have been attacked by many conservatives including U.S. President Donald Trump. The case is
City of Riviera Beach Police Pension Fund v Target Corp (NYSE:TGT) et al, U.S. District Court, Middle
District of Florida, No. 25-00085.
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