Market Recap: How Trade Tensions, Gold Surges, and Economic Data Shaped the Week
3/2/2025 – Trump’s Tariffs Shake Markets, Stocks Trim Losses After Mexico Pause
The global market landscape took a hit this week as Trump’s tariff policies rattled investor sentiment. While U.S. equities initially dipped, losses were later trimmed after a temporary pause on tariffs with Mexico. The uncertainty pushed Treasury yields lower, as investors moved toward safer assets.
Mixed results emerged—U.S. manufacturing showed slight recovery, but Eurozone PMI remained weak. Meanwhile, EU inflation held steady at 2.7%, reflecting volatile price movements. Trade tensions persist, with Canada and Mexico seeking clarity, China pushing for past terms, and Europe advocating unity.
Oil fell on demand concerns, gold surged as a safe haven, and the U.S. Dollar weakened as the Euro rose to $1.0338.
4/2/2025 – Market Turmoil: Stocks Drop, Gold Surges Amid US-China Trade War
Stock markets experienced turbulence amid escalating US-China tariff wars, with the S&P 500 E-minis dropping and gold hitting record highs as investors sought safe havens. The US dollar strengthened, while US Treasury yields fell after weak JOLTS data showed job openings in December at 7.6 million, a 14-month low, indicating a slowing labor market.
The US-China trade conflict further weighed on global sentiment, prompting the IMF to urge key players, including the US, China, Canada, and Mexico, to resolve their disputes.
As trade tensions grew, gold reached a record high, while oil prices fell nearly 2% after a US tariff pause on Mexico and Canada alleviated supply concerns. Meanwhile, New Zealand’s unemployment rate rose to 5.1%, signaling a slowdown in economic activity.
5/2/2025 – Markets Slip as Geopolitical Tensions, Inflation Weigh on Sentiment
U.S. futures signaled a weaker opening, with S&P 500 E-minis down 0.29% and Nasdaq futures down 0.42%, driven by geopolitical tensions and inflation concerns.
Global data showed mixed signals: Japan’s real wages rose 0.6% YoY in December, boosting domestic demand, while New Zealand’s jobless rate hit a 4-year high at 5.1%, possibly prompting more monetary easing and affecting global risk sentiment.
Geopolitical tensions increased as Trump delayed U.S.-China trade talks, Colombia’s President Petro moved to sell Ecopetrol’s U.S. fracking operations, and Mexico opposed sending deportees to Guantanamo Bay, improving U.S.-Mexico relations.
Currency and commodities markets were mixed. Japan’s yen may gain attention with wage growth data, and the Bank of Japan maintains its ultra-loose policy. In the U.S., Treasury’s limited access to Musk’s DOGE project raised concerns over potential data-sharing issues.
6/2/2025 – Markets Mixed as FTSE Hits Record, Yen Climbs, Gold Retreats
The FTSE 100 hit a record high, boosted by AstraZeneca and rate cut expectations, while the S&P 500 rose ahead of tech earnings. U.S. Treasury yields edged up, steadying before payroll data. In forex, the yen reached an 8-week high on BOJ rate hike expectations, while the pound weakened after the BoE rate cut.
Geopolitically, U.S. actions in Gaza drew global criticism of Trump’s proposal, and tensions between the U.S., Europe, and Russia continued, highlighted by military activity in Ukraine. Gold prices dropped 1% after a record rally as traders adjusted before the U.S. jobs report, while oil stayed volatile due to Trump’s plans to boost U.S. supply, pressuring global prices.
7/2/2025 – Global Markets Mixed as Trade Tensions Weigh, Gold Rallies
Global markets were mixed amid trade war concerns and economic surprises. U.S. equities fell on weak payrolls and trade tensions, with oil down for a third week. European markets and Canada’s TSX also declined, though the Canadian dollar saw its biggest gain in two years. U.S. job growth slowed to 4% unemployment, while Canada saw gains. Geopolitical tensions rose as North Korea reaffirmed its nuclear stance, and U.S.-Japan talks focused on trade and security. Brazil upheld austerity, rejecting welfare hikes. Gold rallied for a sixth week on safe-haven demand, while the U.S. dollar strengthened on mixed jobs data and trade uncertainty.
What to be on the lookout for next week?
CPI, Core CPI and PPI (U.S.)
Next week on 12/2/2025, the U.S. will release its CPI and Core CPI reports, which are important measures of inflation. These numbers help guide the Federal Reserve’s decisions on interest rates. If the CPI is higher than 0.4%, it suggests inflation is still a concern, and the Fed might keep rates steady or raise interest rates.
Market participants expect inflation pressures if the reading goes above 0.4%, potentially leading to policy changes. However, if the CPI comes in lower, it could indicate weaker demand, prompting the Fed to consider cutting rates. A higher CPI could lead to more rate hikes and market fluctuations.
As for the Producer Price Index (PPI), it is being released on 13/2/2025, a day after the CPI data releases. The PPI is an index excluding food and energy is an important measure of inflation that affects business costs. If the PPI goes above 3.5%, it could signal higher inflation, leading the Federal Reserve to tighten policies, which may impact the market.
As of now, investors are anticipating moderate inflation, but even a slight rise in the PPI could push the Fed to take a tougher stance on interest rates. Unexpected events or big shifts from usual trends could shake up market expectations, causing volatility in both currency and stock markets.
GDP (U.K.)
Next week on 13/2/2025, the UK will release its GDP report. This is a key measure of the country’s economic health. With the previous GDP at 0 (which means no growth), any shift will influence how the central bank sets policies. If the GDP grows, it might lead to higher interest rates, but if it shrinks, we could see more relaxed policies. The market is expected to react strongly either way.
Most people are expecting some growth, which would ease worries about inflation and rising interest rates. Investors will be watching closely for any surprises.
The big risk is if GDP is much lower than expected, which could cause market panic and spark talk of aggressive rate cuts. Global issues like trade tensions or conflicts could also drag down growth.
