- Asian Stocks Drop After Trump Proposes New Tariffs: Markets Wrap
Asian equities fell, pulling back after a five-day rally that pushed a regional gauge into overbought territory,
as investors turned cautious amid increasing trade tensions and geopolitical uncertainty. The MSCI Asia
Pacific Index dropped as much as 0.6% as stocks in Hong Kong and Japan declined after President Donald
Trump threatened to impose tariffs on automobile, semiconductor and pharmaceutical imports of around
25%. A gauge of technology firms listed in Hong Kong fluctuated after Chinese mainland investors bought
HK$22.4 billion ($2.9 billion) of the city’s stocks on Tuesday. Bloomberg’s gauge of the dollar edged lower. - S&P 500 sets fresh record as stocks rally into the close
The S&P 500 closed at a record high Tuesday after stocks rallied seconds before the closing bell, as investors
shook off headwinds on the global trade and inflation fronts. The broad market index gained 0.24% to a
record close of 6,129.58, after touching an intraday record of 6,129.63 before the final bell. The Nasdaq
Composite closed up 0.07% at 20,041.26, while the Dow Jones Industrial Average added 10 points, or 0.02%,
to finish the session at 44,556.34. - Oil gains on U.S., Russia supply curtailments as market seeks Ukraine talks clarity
Oil prices edged higher on Wednesday amid oil supply disruptions in the U.S. and Russia and as markets
awaited clarity on the Ukraine peace talks. Brent crude futures gained 20 cents, or 0.3% at $76.04 a barrel at
0146 GMT, climbing for a third day. U.S. West Texas Intermediate crude futures for March rose 23 cents, or
0.3%, to $72.08 a barrel, up 1.7% from the close on Friday after not settling on Monday because of the
Presidents’ Day public holiday. The March contract expires on Thursday and the more active April contract
gained 0.3% to $72.04. Russia said oil flows through the Caspian Pipeline Consortium (CPC), a major route for
crude exports from Kazakhstan, were reduced by 30%-40% on Tuesday after a Ukrainian drone attack on a
pumping station. A 30% cut would equate to the loss of 380,000 barrels per day of supply to the market,
according to Reuters calculations. Meanwhile, cold weather threatened U.S. oil supply, with the North Dakota
Pipeline Authority estimating that production in the country’s No. 3 producing state would be down by as
much as 150,000 bpd because of the cold. U.S. President Donald Trump’s administration said on Tuesday it
had agreed to hold more talks with Russia on ending the war in Ukraine. A deal could ease or help remove
sanctions that have disrupted the flows of Russian oil shipments. Israel and Hamas will also begin indirect
negotiations on a second stage of the Gaza ceasefire deal, officials said on Tuesday. However, Trump said on
Tuesday he intends to impose auto tariffs “in the neighborhood of 25%” and similar duties on
semiconductors and pharmaceutical imports. Tariffs could raise prices for consumer products, weaken the
economy and reduce demand for fuel. - Gold falls on profit-taking, hopes for Russia-Ukraine peace talks
Gold fell on Wednesday on profit-taking after prices hit record highs recently, with investors watching out for
peace talks after U.S. President Donald Trump’s administration agreed to hold more talks with Russia on
ending the war in Ukraine. Spot gold shed 0.2% to $2,928.52 an ounce, as of 0338 GMT, $14 shy of its all-time
high of $2,942.70 hit last week. U.S. gold futures dropped 0.1% to $2,945.90. “Gold’s upside remains capped
as first round of talks between the U.S. and Russia over potential peace deal in Ukraine has ended with no
clear path but if they come out with a solid plan, then definitely it could be negative for gold,” said Ajay
Kedia, director at Mumbai-based Kedia Commodities. - Japan’s exports rise again ahead of Trump’s tariff measures
Japan’s exports rose at a faster clip in January as businesses ramped up orders just as US President Donald
Trump unleashed a barrage of protectionist policies expected to take effect in coming months. Exports
measured by value increased 7.2% from a year earlier led by shipments of cars and ships, the Ministry of
Finance reported Wednesday. That compared with the consensus estimate of a 7.7% gain. Shipments to
China fell as the lunar new year holidays disrupted trade flows. Imports surged 16.7% led by communication
machinery and computers, and beat the median estimate of a 9.3% increase. Japan’s trade balance swung
back into the red, with a deficit of ¥2.76 trillion ($18.2 billion), the largest in two years. By region, shipments
to the US rose 8.1%, while those to China fell 6.2%. Exports to Europe declined 15.1%. - France’s 2026 budget to be a ‘demanding’ undertaking, French economy minister warns
Ironing out the 2026 budget of the euro zone’s second-largest economy will prove a “demanding” task,
French Economy Minister Eric Lombard told CNBC’s Charlotte Reed, after lawmakers earlier this month finally
adopted 2025′s financial plan after a spate of tumultuous, government-toppling attempts. France has charted
a trajectory to reduce its public deficit, aiming to reach 5.4% of the national GDP in 2025 and to dip below 3%
in 2029, Lombard said. Under European Union spending rules, member states must keep their deficits below
3% of GDP. “2026, yes, it is a very demanding budget, because we will continue to diminish the deficit and to
be below, of course, below 5.4%, and probably below 5%,” the economy minister told CNBC on Monday,
noting that the final target hadn’t been set in stone. “We are going to work with all the political parties to
discuss, to talk with us. We are going, also, to work with the unions, with the employers, in order to reach a
consensus on the main policies that are key for the country, and policies on which we can make adjustments
that will allow us to spend less in 2026,” he said. The absence of a budget and broader instability in French
politics has bled into markets over recent months. Lombard conceded a “negative impact on growth,”
expressing hope that investors will now return to France. The country’s economic performance shrivelled
with a 0.1% contraction in the fourth quarter, from 0.4% growth in the preceding three months, with the
Bank of France expecting a meagre 0.1-0.2% rise in the national GDP in the first quarter amid anticipated
increases in market services and the energy sector, according to its latest monthly business survey. The
International Monetary Fund anticipates the French economy will expand by 0.8% across the full-year 2025
period. - Singapore budget 2025: More support for businesses and households to ease living costs
Singapore has announced a slew of support measures for both households and businesses in 2025, including
vouchers and tax breaks, in its first budget under Prime Minister Lawrence Wong. Wong said that this comes
amid concerns over rising costs, given the rise in global inflation following the Russia-Ukraine war and
disruptions in energy, food and supply chains. Wong announced more consumption vouchers and utility
rebates for households. Each household will receive 800 Singapore dollars ($596) in consumption vouchers
over the course of 2025. On the business front, Wong announced a 50% rebate for corporate income tax for
companies, with a minimum of SG$2,000 and a cap of SG$40,000. The government will also increase co
funding levels for companies who raise the salaries of lower wage workers. While Wong said that these
measures, along with those announced in previous budgets, will mitigate the impact of rising costs, he added
that “the best way to adjust to higher prices is to grow the economy and increase productivity, so that
Singaporeans can enjoy higher real incomes and better standards of living.” - Trump says he will introduce 25% tariffs on autos, pharmaceuticals and chips
U.S. President Donald Trump said on Tuesday he intends to impose auto tariffs “in the neighborhood of 25%”
and similar duties on semiconductors and pharmaceutical imports, the latest in a series of measures
threatening to upend international trade. On Friday, Trump said levies on automobiles would come as soon
as April 2, the day after members of his cabinet are due to deliver reports to him outlining options for a range
of import duties as he seeks to reshape global trade. Trump has long railed against what he calls the unfair
treatment of U.S. automotive exports in foreign markets. The European Union, for instance, collects a 10%
duty on vehicle imports, four times the U.S. passenger car tariff rate of 2.5%. The U.S., though, collects a 25%
tariff on pickup trucks from countries other than Mexico and Canada, a tax that makes the vehicles highly
profitable for Detroit automakers. EU trade chief Maros Sefcovic will meet with U.S. counterparts –
Commerce Secretary Howard Lutnick, Trump’s nominee to be U.S. Trade Representative Jamieson Greer and
National Economic Council director Kevin Hassett – in Washington on Wednesday to discuss the various tariffs
threatened by Trump. Asked whether the EU could avoid reciprocal tariffs he proposed last week, Trump
repeated his claim that the EU had already signaled it would lower its tariffs on U.S. cars to the U.S. rate,
although EU lawmakers have denied doing so. He said he would press EU officials to increase U.S. imports of
cars and other products. - China deal-making ramps up after years of decline as domestic companies prepare for Trump tariffs
China is starting to see a rebound in its mergers and acquisition scene after years of decline as the
government’s stimulus measures start to bear fruit, while pressure from Donald Trump’s tariffs is also driving
industry consolidation. In 2024, China’s M&A activity was on course to log its fifth straight year of decline,
until the final quarter of the year, which saw a sudden acceleration in activity. The value of deals conducted
during that period jumped 78.5% to $129 billion from $72 billion in the previous quarter, data from Dealogic
showed. And deal-making is about to pick up more, according to industry watchers whom CNBC spoke to.
The uptick in deal flow in the fourth quarter of 2024 was in part fueled by stimulus efforts introduced by
policymakers in late September, said Vivian Wong, head of M&A Analytics at ION Analytics, which is under
the same group as Dealogic. Those measures aimed to consolidate domestic industries in order to enhance
competitiveness in China’s slowing economy, added Wong. China’s M&A volume has been trending
downward since 2020. Furthermore, the total value of deals logged in 2024 is about 45% less than the $553
billion generated in 2020, according to data from Dealogic. This was largely because of weak overall
economic activity in China and the ensuing bearish sentiments, said Theodore Shou, chief investment officer
at Skybound Capital, an alternative assets manager. - Fed’s Barr comments on inflation progress and policy uncertainties
Federal Reserve Vice Chair for Supervision, Michael Barr, addressed the Council on Foreign Relations today,
discussing the state of the economy, inflation, and policy uncertainties. Barr expressed positive sentiments
about the economy, citing strong growth in the past year, and a low and stable unemployment rate. He also
mentioned substantial progress made on inflation, while acknowledging that there is still more work to be
done. He described the path towards a 2% inflation rate as “bumpy but steady.” Barr also addressed the
inflation spike seen in January, attributing it to anticipated seasonal patterns. He expects this to moderate in
the months of February or March, though changes in policy environment may affect this. When asked about
tariffs, Barr stated that it is too early to determine how they will impact the economy. He emphasized the
existing uncertainties about the policy, such as which products will be affected, the duration of the tariffs,
and whether they will be permanent or temporary. Barr expressed a preference for understanding policy
first, then assessing its implications for the economy, and finally its effects on monetary policy. He reassured
that the Federal Reserve is closely monitoring data as it evolves, and is prepared to act if inflation drops
faster than expected or if the labor market weakens more than projected. Barr also mentioned that it’s too
early to predict the effects of immigration policy on the economy and, by extension, monetary policy. He
noted that, in theory, a reduced labor force could lead to decreased potential output, but indicated that the
Federal Reserve will be looking to see if this effect is significant. - US and Russia Move to Revive Ties as Ukraine Is Cut Out
Top officials from the US and Russia met for a first round of talks over the war in Ukraine and raised the
possibility of broader cooperation, signaling President Donald Trump desire to reboot a battered relationship.
The two sides ended more than four hours of negotiations in the Saudi capital Riyadh on Tuesday with a
pledge to appoint high-level teams to work toward ending the conflict “as soon as possible in a way that is
enduring, sustainable and acceptable to all sides,” the US State Department said. - Hamas Offers to Free All Hostages for Israel’s Gaza Withdrawal
Hamas said it’s ready to exchange its remaining Israeli hostages all at once with Palestinian prisoners during
the Gaza truce’s second phase as a step leading to a “permanent ceasefire” and the full withdrawal of Israel’s
forces from the enclave. The militant group is attempting to hold onto its two longstanding demands as
Israel’s security cabinet has a stated war goal of removing Hamas, designated a terrorist group by the US and
many other countries, as a governing and military force in Gaza. - Intel stock posts biggest five-day gain in history amid report of potential breakup
Intel (INTC) stock jumped 16% Tuesday following a report that its rivals Broadcom (AVGO) and TSMC (TSM)
are exploring potential deals with the chipmaker that would split it into two. The Wall Street Journal reported
late Saturday that Broadcom (AVGO) is considering making a bid for Intel’s product business, which designs
semiconductors for computers and servers. The Journal, which cited people familiar with the matter, said
TSMC has looked at controlling some or all of Intel’s factories, potentially as part of an investor consortium.
The companies have not submitted deals to Intel, and the talks are preliminary and informal, the Journal
wrote. Broadcom shares fell nearly 2% Tuesday, while US-listed TSMC shares were down less than 1%.
Intel’s 16% gain Tuesday was its biggest single-day jump since March 2020. The surge puts Intel shares up
38.5% over the past five days, the largest gain in the company’s history as a public company. Intel stock has
been on a tear over the past week. The stock notched its biggest weekly gain since 2000 last Friday as the US
signaled support for domestic chipmaking and reports surfaced that the US government was allegedly in talks
with TSMC to support Intel’s turnaround efforts. Intel’s manufacturing business primarily makes chips for
itself (Intel’s product business) but opened up a foundry — in other words, began taking on external
customers — in 2022 under the leadership of then-CEO Pat Gelsinger. Gelsinger had pushed to launch a
foundry business competitive with Taiwan’s TSMC in an attempt to right Intel’s struggling manufacturing
division, which had suffered from setbacks since the mid-2010s. - Super Micro Computer stock surges 16.5% as strong earnings raise hopes it won’t be delisted
Super Micro Computer (SMCI) continued its strong rally a week after reporting impressive earnings, even as
U.S. stocks remained relatively stable overall on Tuesday following the long weekend. Shares of the AI
hardware company surged 13% on Tuesday, trading at $55.8 a piece. The sustained momentum comes as
Super Micro’s latest earnings report reassured investors about its delayed annual filing and outlined an
ambitious growth target for 2026. Super Micro is working to avoid delisting by Nasdaq, with a deadline of
February 25 to submit its delayed annual report to the Securities and Exchange Commission (SEC). CEO
Charles Liang seemed confident that it would be submitted on time. Since last week, investors have been
bullish about SMCI’s performance. In its earnings report, the company expects to reach $40 billion in revenue
by fiscal 2026, while analysts anticipated $30 billion for that period. Last week, banking giant JPMorgan (JPM)
analysts raised the SMCI stock price target to $35 from $23 while keeping an ‘underweight’ rating. SMCI stock
has risen 80% year-to-date. - Nike Inc. and Kim Kardashian’s underwear label Skims are teaming up on a new fitness brand geared
toward women
Nike and Skims said they’re working on an “extensive line” of apparel, footwear and accessories together
under the brand NikeSkims. The new partners say they have long-term vision for body-fitting activewear for
women. The first NikeSkims collection will debut in the spring, Kardashian said. Executives plan to expand the
brand globally in 2026. Nike has put a renewed focus on women athletes as it begins a turnaround effort
under new Chief Executive Officer Elliott Hill. Earlier this month, it aired an ad at the Super Bowl for the first
time in decades, spotlighting top women sports stars such as the WNBA’s Caitlin Clark, sprinter Sha’Carri
Richardson and gymnast Jordan Chiles. Nike shares rose 6.2%.
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