| Name | Daily Close | Daily Change | Daily Change (%) |
|---|---|---|---|
| Dow | 42520.99 | -670.25 | -1.55% |
| S&P 500 | 5778.15 | -71.57 | -1.22% |
| Nasdaq | 18285.16 | -65.03 | -0.35% |
| VIX | 23.51 | 0.73 | 3.20% |
| Gold | 2927.6 | 7 | 0.24% |
| Oil | 67.95 | -0.31 | -0.45% |
US MARKET
Intra-day swings were very marked and by the end of the day the sense one could gain is that any ‘buy the dip’ dynamic does not have much power at the moment. US stocks closed sharply lower on Tuesday, extending losses from the previous session as escalating trade tensions between the US and its key trading partners rattled the markets.
The S&P 500 fell 1.4%. The Nasdaq 100 fell 0.5%. The Dow Jones Industrial Average fell 1.7%. A gauge of the Magnificent Seven megacaps slid 0.1%. The Russell 2000 dropped 1%. The yield on 10-year Treasuries rose four basis points to 4.20%. A dollar gauge slid 0.6%.
New tariffs imposed by President Trump—25% on Canadian and Mexican goods and an additional 10% on Chinese imports—took effect today, triggering retaliatory measures from Canada and China and fuelling fears of a worsening trade war. Mexico is expected to announce its response on Sunday. Traders are now closely monitoring Trump’s address to Congress for potential signals on the future of trade policy.
Meanwhile, Tesla plunged 4.4% after data revealed its vehicle sales in China dropped nearly 50% year-over-year in February. Shares of GM and Ford slid 4.6% and 2.9%, respectively, as concerns over rising tariff-induced costs weighed on the auto sector.
Worth noting that European shares retreated from record highs, joining a global sell-off after US tariffs on Canada, Mexico and China took effect. The pan-European STOXX 600 index closed 2.1% lower, its worst day since August last year.
The rout in the S&P 500 Index has boosted demand for short-term hedges, flipping the Cboe VIX Futures curve into a rare inversion. VIX backwardation — when near-term contracts are higher than long-term — is indicative of market stress. While the curve is technically backwardated, what also stands out is how flat the curve is overall. That is, traders are pricing for volatility to persist as economic uncertainty increases, as opposed to just a one-time shock to the market.
The VIX is now materially up.
LOCAL MARKET
The S&P/ASX 200 Index dropped 0.68% to close at 8,189 on Tuesday, nearing its lowest level in two months, following confirmation from US President Donald Trump that tariffs on key trading partners would take effect on Tuesday. Given Australia’s heavy reliance on exports, any disruptions to global trade are expected to have significant repercussions on the economy.
Meanwhile, investors processed data showing that Australian retail sales returned to growth in January, with consumer spending showing signs of improvement. Additionally, minutes from the Reserve Bank of Australia’s last meeting indicated that policymakers were particularly focused on the downside risks to the economy. Notable losses were seen in major index constituents, including Fortescue (-3.6%), Woodside Energy (-3.3%), Coles Group (-1%), Zip Co (-7.5%), and Mineral Resources (-9.7%).
Australian shares are poised to fall following the Wall Street lead. ASX futures slipped 0.2 per cent, or by 19 points, predicting the index would extend the prior session’s losses.