Global Markets Cautious as Tariff Uncertainty, AI Concerns, and Geopolitical Risks Weigh on Sentiment

Index Update:  Software stocks saw a modest rebound after early-week losses driven by fears that AI tools could displace traditional service providers. Payment companies remained under pressure amid concerns that stablecoin adoption and a softer labor market could disrupt conventional financial infrastructure and transaction volumes. Meanwhile, the administration is reportedly preparing to raise Section 122 tariffs from 10% to 15%, and Nvidia along with other chipmakers traded lower ahead of Nvidia’s upcoming earnings release.

Market Movers:  On Monday, the top gainers were Vanda Pharmaceuticals Inc. (+41.49%), followed by Jyong Biotech Ltd. (+35.82%). On the contrary, iPower Inc. (-31.69%), and NovaBay Pharmaceuticals, Inc. (-30.14%) declined the most the same day.

Commodities Update:  Oil prices hovered near seven-month highs ahead of upcoming U.S.–Iran nuclear talks in Geneva. Brent crude slipped 0.2% to USD 70.95 per barrel, while WTI fell 0.1% to USD 66.22, with both benchmarks trading at levels last seen in early August 2025. Markets remain cautious amid rising geopolitical tensions and concerns over potential military conflict as Washington pushes to curb Iran’s nuclear program. Gold fell 1% to around USD 5,170 per ounce after four straight gains as investors locked in profits amid renewed global trade uncertainty and geopolitical tensions, with a 10% U.S. tariff taking effect and the White House reportedly considering raising it to 15% following a Supreme Court ruling that blocked earlier levies; trade partners such as the EU and India are reassessing agreements, while markets also await U.S.–Iran nuclear talks. Meanwhile, silver steadied above USD 88 per ounce after briefly dipping below USD 85, supported by renewed Chinese trading activity, as investors assessed the implications of potential changes to U.S. tariffs and ongoing geopolitical risks.

Macro Updates:  Trade Policy Uncertainty Deepens Amid Tariff Rollout and Legal Challenges

Markets remain uneasy as a 10% U.S. tariff took effect following a Supreme Court ruling that struck down former President Trump’s “reciprocal” levies. Although the current rate is lower than the previously suggested 15%, the White House is reportedly preparing a formal order to raise it. Uncertainty persists over the status of trade agreements with key partners, with Trump warning countries not to reconsider existing deals. Meanwhile, FedEx has filed a lawsuit seeking refunds on tariffs paid, becoming the first company to do so after the ruling. The Supreme Court’s decision has also cast doubt over the fate of more than $160 billion in tariff revenue collected to date.

Dollar Firms as Trade Tensions and Geopolitical Risks Resurface

The dollar index rose above 97.8, recovering from prior weakness as investors evaluated ongoing U.S. trade uncertainty. FedEx filed a lawsuit seeking tariff refunds after the Supreme Court struck down emergency levies, prompting President Trump to threaten raising global tariffs from 10% to 15% and warn trading partners against revisiting agreements. While major partners have so far maintained existing deals, concerns persist over potential disruptions. Markets are also monitoring renewed U.S.–Iran talks and reports that U.S. authorities led recent currency rate checks to support the Japanese yen.

Bonds Commentary:  The 10-year U.S. Treasury yield rose to around 4.05%, rebounding from the previous session’s decline as investors weighed ongoing trade uncertainty. FedEx filed a lawsuit seeking refunds after the Supreme Court struck down emergency tariffs, prompting President Trump to threaten raising global tariffs from 10% to 15% and warn trading partners against revisiting agreements. Meanwhile, Fed Governor Christopher Waller signaled openness to keeping rates unchanged in March if labor market data remains strong, while markets also monitored upcoming U.S.–Iran talks.

Futures Update:  U.S. stock index futures edged higher on Tuesday, recovering modestly from the prior session’s decline as investors assessed ongoing uncertainty around global trade tensions and concerns over AI-related disruptions ahead of Nvidia’s upcoming earnings. Dow Jones Futures rose 0.1%, S&P 500 Futures gained 0.2%, and Nasdaq 100 Futures advanced 0.3%.

After turning in a strong performance last week, stocks moved sharply lower during trading on Monday. The major averages all posted significant losses, with the Dow tumbling to its lowest closing level in a month. The S&P 500 declined by 71.78 points, or 1.04%, to finish at 6,837.74. From a technical standpoint, the S&P 500 index encountered resistance at key levels and drifted lower, signaling the possibility of further near-term downside, a scenario we had highlighted in previous commentary. Additionally, the 14-day Relative Strength Index (RSI) slipped below the midpoint, reflecting growing bearish sentiment. Immediate support is seen around 6,760, which may act as a potential bounce zone, while resistance is located near 6,933.