Global Jitters: Trade Tensions Rattle Markets as Commodities Rebound and Optimism Fades

Image Source : Krish Capital Pty Ltd

Index Update

On Monday, the Dow and S&P 500 fell for a third straight session, while the Nasdaq edged up 0.1% as investors bought into major tech stocks like Nvidia, Amazon, and Palantir. Markets briefly rallied on false rumors of a 90-day tariff pause, which the White House denied. Treasury Secretary Scott Bessent noted that around 70 countries, including Japan, are seeking tariff talks. Investors are now turning their attention to upcoming inflation data, which could impact the Fed's policy outlook.

Market Movers

On Monday, the top gainers were Lexeo Therapeutics, Inc (+7.92%), followed by CoStar Group, Inc (+5.82%). On the contrary Cresud S.A.C.I.F. y A. (-22.55%) and Kingsoft Cloud Holdings Limited (-17.54%) declined the most the same day.

Commodities Update

WTI and Brent crude oil futures bounced back after a sharp three-session decline that had pushed prices to their lowest levels in nearly four years. The drop was largely driven by fears that President Trump’s escalating trade war—particularly his threat of a 50% tariff on China—could trigger a global recession and reduce energy demand. The EU’s proposed 25% counter-tariffs on U.S. goods, an upcoming OPEC+ output increase, and Saudi Arabia’s decision to lower official selling prices further contributed to the downward pressure. Geopolitical tensions also played a role, with Trump warning Iran amid plans for direct nuclear talks.

Gold prices rose above $3,000 per ounce, rebounding from a recent four-week low, as investors sought safe-haven assets amid growing economic uncertainty. Concerns over a deepening trade conflict, combined with anticipation around key U.S. economic reports—including Fed meeting minutes, inflation, and producer price data—boosted demand for bullion. Despite recent weakness, gold remains strong and has gained over 14% year-to-date.

Macro Update

The NFIB Small Business Optimism Index dropped sharply to 97.4 in March 2025, its lowest level since October 2024 and the largest decline since June 2022, falling well below expectations. The Uncertainty Index also declined, signaling that businesses are gaining clarity on new policy impacts. However, sentiment weakened across several key areas: sales growth expectations, business conditions outlook, earnings, hiring plans, expansion intentions, inventory levels, and credit expectations all saw notable declines, reflecting growing caution among small business owners.

Futures Update

U.S. stock index futures surged following a volatile session marked by uncertainty over President Trump’s tariff policy. Despite earlier sharp losses, markets rebounded on false rumors of a tariff reprieve, leading to wild intraday swings. The Dow and S&P 500 ended slightly lower, while the Nasdaq edged up. Volatility spiked sharply, with the VIX reaching levels not seen since the early COVID-19 sell-off, and trading volumes hit an 18-year high. Still, the S&P 500 has dropped over 10% across the last three sessions.

After facing its worst week since the pandemic, Wall Street continued to experience losses on Monday as the Trump administration reaffirmed its commitment to maintaining significant tariffs. However, the markets rebounded from their daily lows later in the day. The S&P 500 dipped by 11.85 points, or 0.23%, closing at 5062.24. The index found support at crucial levels and began to rise, signaling the potential for short-term gains, with support identified near 4930 and resistance at 5293. Furthermore, the 14-period RSI indicates that the index is in oversold territory, suggesting a possible bounce back in the near future.