- Equities Decline, Bonds Rise on Tariff Concerns: Markets Wrap
A selloff in equities spread to Asia after President Donald Trump’s pledge to impose tariffs on trading
partners raised concerns about a worsening trade war hurting global economic growth. Treasury yields
tumbled to the lowest in more than four months. Asian shares sank to the lowest level in a month after the
S&P 500 saw its worst selloff this year as the US president said Mexico and Canada couldn’t negotiate a
reprieve from tariffs set to take effect Tuesday. Trump also signed an order doubling a levy on China to 20%.
Oil dropped to the weakest level in three months and a gauge of the largest 100 digital tokens tumbled. - Dow tumbles more than 600 points, S&P 500 posts biggest loss since December as Trump says tariffs will
proceed
The S&P 500 retreated on Monday, extending February’s rout and turning red for the year after President
Donald Trump’s confirmation of forthcoming tariffs. The broad index fell 1.76% to end at 5,849.72, marking
its worst day since December and bringing its year-to-date performance to a loss of about 0.5%. The Dow
Jones Industrial Average dropped 649.67 points, or 1.48%, to finish at 43,191.24. The Nasdaq Composite slid
2.64% to close at 18,350.19, weighed down by Nvidia’s decline of more than 8%. - Oil prices slide on Ukraine aid pause, tariffs and OPEC+ output increase
Oil prices continued to fall in on Tuesday after U.S. President Donald Trump paused military aid
to Ukraine and as markets braced for U.S. tariffs on Canada, Mexico and China to take effect. Brent futures
fell 54 cents, or 0.75%, to $71.08 a barrel by 0149 GMT, while U.S. West Texas Intermediate (WTI) crude fell
36 cents, or 0.53%, to $68.01. The pause to all U.S. military aid to Ukraine confirmed by a White House
official on Monday followed Trump’s Oval Office clash with Ukrainian President Volodymyr Zelenskiy last
week. The market has viewed the growing distance between the White House and Ukraine as a sign of a
potential easing of the conflict that could lead to sanctions relief for Russia and more oil supply returning to
the market. The pause followed a Reuters report that the White House has asked the State and Treasury
departments to draft a list of sanctions that could be eased for U.S. officials to discuss with Russian
representatives in the coming days as part of talks with Moscow, according to sources. However, Goldman
Sachs analysts have said that Russian oil flows are constrained more by Russia’s OPEC+ production target
than sanctions and that an easing might not significantly increase flows. A decision by OPEC+ to proceed with
a planned oil output increase of 138,000 barrels per day, the first since 2022, is also weighing on
prices. Oil prices fell about 2% to a 12-week low on Monday on the news and on worries that fresh U.S. tariffs
will hurt global economic growth. Trump’s 25% tariffs on imports from Canada and Mexico are set to take
effect at 12:01 a.m. EST (0501 GMT) on Tuesday with 10% tariffs for Canadian energy, while imports on
Chinese goods will increase to 20% from 10%. Analysts expect the tariffs to weigh on economic activity and
fuel demand, putting downward pressure on oil prices. - Gold eases as investors exercise caution ahead of Trump tariffs
Gold prices edged down on Tuesday as market participants exercised caution and braced for U.S. President
Donald Trump’s tariffs on Canada, Mexico, and China to go into effect within hours. Spot gold edged down
0.3% to $2,885.40 an ounce, as of 0300 GMT. U.S. gold futures eased 0.2% to $2,895.40. “This pull back is
part of a broader shake-out in markets that could drive prices into the $2,700s before the primary uptrend
continues,” Capital.com’s financial market analyst Kyle Rodda said. It’s a modest move down so far on
Tuesday, Rodda said, adding that the clear deterioration in global trade relations and the weaker dollar on
fears of a sudden slow down in U.S. growth had given the market a solid boost overnight. Trump said on
Monday that 25% tariffs on goods from Mexico and Canada will take effect from 0501 GMT on Tuesday,
along with a doubling of China levies to 20%, stoking fears of a trade war in North America and sending
financial markets reeling. Trump also said reciprocal tariffs would take effect on April 2 on countries that
impose duties on U.S. products. Trump’s tariff plans are widely seen as inflationary, and has prompted
increased safe-haven flow into bullion, which has gained around 10% so far for the year. - China retaliates with additional tariffs of up to 15% on some U.S. goods from March 10
China announced Tuesday it would impose additional tariffs of up to 15% on some U.S. goods from March 10
and restrict exports to 15 U.S. companies. The retaliatory measures from China’s Ministry of Finance and
Ministry of Commerce came just as additional U.S. tariffs took effect on Chinese goods. The additional
Chinese tariffs largely cover U.S. agricultural goods, including corn and soybeans, which will be subject to new
duties of 15% and 10%, respectively, according to the finance ministry’s website. Companies affected by the
export controls include Leidos and General Dynamics Land Systems, according to the commerce ministry.
China’s relationship with the U.S. is bound to see disagreements, but China will not accept pressuring or
threatening, Lou Qinjian, spokesperson for the third session of the 14th National People’s Congress, told
reporters Tuesday morning. The congress is set to kick off an annual meeting on Wednesday. The White
House has confirmed that new duties of 10% on Chinese goods are set to take effect Tuesday, bringing the
total amount of new tariffs imposed in just about a month to 20%. In a statement published earlier in the
day, China’s Ministry of Commerce said Beijing “firmly rejects” additional U.S. tariffs on Chinese goods and
will take countermeasures. The duties will “hurt” U.S.-China trade relations and China urges the U.S. to
withdraw them, the ministry said in Chinese, translated by CNBC. Beijing has previously warned of
countermeasures, but had yet to detail any as of Tuesday morning. - Euro zone inflation dips less than expected to 2.4% in February
Euro zone inflation eased to 2.4% in February but came in slightly above analyst expectations, according to
flash data from statistics agency Eurostat. Economists surveyed by Reuters had expected inflation to dip to
2.3% in February, down from the 2.5% reading of January. Euro zone inflation re-accelerated in the fourth
quarter, but European Central Bank policymakers remain optimistic about its trajectory. Accounts from the
central bank’s January meeting last week showed that policymakers believed inflation was on its way to
meeting the 2% target, despite some lingering concerns. The ECB meets again later this week and is widely
expected to announce another interest cut, which would mark its sixth reduction since it started easing
monetary policy back in June. Markets will also pay close attention to the ECB statement accompanying the
rate decision, searching for clues on policymakers’ assessment of inflation and monetary policy restrictions.
The Monday data comes after several major economies within the euro zone reported inflation data last
week. Provisional data showed that February inflation was unchanged at a higher-than-expected 2.8% in
Germany, but eased sharply to 0.9% in France. The readings are harmonized across the euro zone to ensure
comparability. - Trump dashes hopes for last-minute Canada and Mexico deal ahead of 25% tariffs
President Donald Trump said that on Tuesday he will impose 25% tariffs on goods imported from Canada and
Mexico, dashing hopes for a last-minute deal that could avoid a trade war with two of the U.S.′ top trading
partners. Trump told reporters there was “no room left for Mexico or for Canada” to negotiate an alternative
to the tariffs, which he has threatened to impose for weeks. “They’re all set. They go into effect tomorrow,”
the president said at a White House event Monday. - Trump halts all U.S. military aid to Ukraine, White House official says
U.S. President Donald Trump has paused all military aid to Ukraine following his clash with Ukrainian
President Volodymyr Zelenskiy last week, a White House official said on Monday. “President has been clear
that he is focused on peace. We need our partners to be committed to that goal as well. We are pausing and
reviewing our aid to ensure that it is contributing to a solution,” said the official, speaking on the condition of
anonymity. Zelenskiy’s office did not immediately respond to a Reuters request for comment outside office
hours. The move comes after Trump upended U.S. policy on Ukraine and Russia upon taking office in January,
adopting a more conciliatory stance towards Moscow – and after an explosive confrontation with Zelenskiy at
the White House on Friday in which Trump criticized him for being insufficiently grateful for the Washington’s
backing in the war with Russia. - Singapore is investigating whether Dell and Super Micro servers shipped to Malaysia contained Nvidia
chips barred from China, highlighting the role of middlemen in funneling high-end semiconductors
Authorities are probing if the servers made their way to other countries, and have requested further
information from Malaysia and the US to determine the final destination of the servers. The case is part of a
broader effort to crack down on the flow of restricted technology to China, with the US investigating whether
Chinese companies have circumvented export controls with the help of third parties in Singapore. - According to a Reuters report, Nvidia and Broadcom are running manufacturing tests with Intel’s 18A
process, signifying potential for the struggling chipmaker
Intel’s 18A process can make advanced artificial intelligence processors and other complex chips and
competes with Taiwan Semiconductor Manufacturing Co. technology. The tests reflect the companies’
exploration of plans to commit hundreds of millions of dollars’ worth of manufacturing contracts to Intel.
Apparently, Advanced Micro Devices is also considering using Intel’s 18A manufacturing process for its needs.
Meanwhile, Intel said it bagged deals with Microsoft and Amazon.com to produce chips on 18A. - Huawei charts cautious global comeback with ultra-expensive phones — but major challenges remain
Huawei has launched the Mate XS and Mate XT trifold outside of China as it charts a cautious return to
international markets. At the Mobile World Congress (MWC) in Barcelona Huawei showed off its Mate XT
underscoring its strategy of maintaining its brand image as an innovative company while selling high-end
smartphones. While Huawei has made a comeback in China, analysts said it will not see the same success
overseas, especially as it still remains cut off from Google services. - Nvidia stock tumbles over 8% to close at lowest level since September
Nvidia (NVDA) stock sank 8.7% Monday to its lowest closing price since last September as reports surfaced of
the tech giant’s AI chips reaching China despite export controls. The Wall Street Journal reported late Sunday
that Nvidia’s latest Blackwell chips are reaching China through third-party resellers using entities registered in
nearby regions in violation of export controls. That report was followed by news that Singapore is probing
Nvidia’s customers Dell (DELL) and Super Micro Computer (SMCI) — companies that make servers using the
chipmaker’s Blackwell GPUs (graphics processing units) — for potentially violating US export restrictions in
shipping servers that may contain Nvidia chips from Singapore to Malaysia. Malaysia is reportedly a
throughpoint of chip smuggling to China. Dell stock fell nearly 7% following the announcement of the probe,
while Super Micro shares dropped 13%. Super Micro’s decline comes after the server maker’s shares suffered
a nearly 30% loss last week. Shares of British chip designer Arm (ARM) also sank Monday, dropping roughly
8%. - AST SpaceMobile beats Q4 estimates, shares rise on revenue growth
AST SpaceMobile, Inc. (NASDAQ:ASTS), the company building a space-based cellular broadband network,
reported better-than-expected fourth quarter results, sending shares up 2.1% in after-hours trading. The
satellite communications firm posted a narrower loss of $0.18 per share, beating analyst estimates of a $0.21
per share loss. Revenue came in at $4.42 million, surpassing the consensus forecast of $3.22 million and
marking significant growth from the same quarter last year when revenue was negligible. AST SpaceMobile’s
CEO Abel Avellan said, “2024 was a milestone year for AST SpaceMobile, and we enter 2025 even better
positioned to lead the emerging direct-to-device satellite communications industry that we invented.” The
company reported cash, cash equivalents, and restricted cash of $567.5 million as of December 31, 2024. Pro
forma for a recent convertible notes offering, AST SpaceMobile’s cash position stands at nearly $1 billion.
Operating expenses for Q4 2024 decreased to $60.6 million from $66.6 million in Q3, primarily due to lower
research and development costs and depreciation expenses. AST SpaceMobile highlighted several key
developments, including a definitive commercial agreement with Vodafone (NASDAQ:VOD) through 2034
and a $43 million contract with the U.S. Space Development Agency. The company also achieved full
operational status for its first five BlueBird commercial satellites and is preparing to begin testing services
with major telecom partners in multiple countries. - GitLab beats Q4 profit estimates, shares down on annual outlook
Gitlab Inc (NASDAQ:GTLB) reported fourth-quarter earnings above Wall Street expectations on Monday, but
its full-year profit forecast fell short of estimates, sending shares down 3.2% in extended trading.
The DevOps platform provider posted adjusted quarterly earnings per share of $0.33, beating analysts’
estimates of $0.23. Revenue rose to $211.4 million for the quarter ended Jan. 31, also surpassing
expectations of $206.15 million. GitLab expects adjusted earnings per share of $0.14 to $0.15, for the first
quarter, which is in line with the consensus estimate of $0.15. It forecast revenue of $212 million to $213
million, compared with analysts’ average estimate of $212.4 million. However, the company’s full-year fiscal
2026 earnings guidance of $0.68 to $0.72 per share came in below analysts’ expectation of $0.81. It projected
revenue between $936 million and $942 million, slightly below the consensus estimate of $941.8 million. - Okta delivers upbeat guidance, better-than-expected Q4 results; shares jump
Okta on Monday delivered upbeat guidance following fourth-quarter results that topped Wall Street
estimates amid growing cybersecurity demand. Okta Inc (NASDAQ:OKTA) was up 15% in recent afterhours
trading following the report. For the three months ended Jan. 31, the company reported adjusted earnings
per diluted share of $0.78 on revenue of $682 million, beating estimates for $0.74 on $668.9M. For the
current quarter, adjusted per-share ent income, which strip out one-time items, is seen at $0.76 to 0.77,
beating Wall Street projections of $0.7. Revenue of $678M to $680M was also above the $669.4M called for
by analysts. Current remaining performance obligations, or cRPO, a gauge of booked revenue over the next
12 months for Q1 was seen $2.185B to $2.190B, representing a growth rate of 12% year-over-year. Looking
further ahead, the company forecast non-GAAP diluted net income per share was seen in a range of $3.15 to
$3.20 on revenue of $2.850B to $2.860B.
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