📆 Tuesday, February 4
► European equities are mixed as ongoing tariff tensions between the US and its major trading partners continue to weigh on investor sentiment. The Stoxx 600 is trading 0.1% lower, with some losses in the telecoms, financials and consumer discretionary sectors. The German DAX rose 0.15%, while the French CAC 40 gained 0.25%, reflecting cautious trading in the region. Corporate earnings provided mixed signals. BNP Paribas rose 2.75% after trading revenues beat expectations thanks to a robust performance in fixed income. In contrast, UBS shares fell 3.9% despite beating earnings expectations as concerns over higher capital requirements in Switzerland spooked investors. Vodafone plunged 5.7% after disappointing results linked to worsening conditions in Germany, the company's largest market. Diageo also came under pressure, falling 2.5% after the company suspended its medium-term guidance, citing macroeconomic uncertainties related to the evolving tariff landscape. Spotify rose 9% after strong user and profitability metrics.
► US stock futures are trading lower, suggesting that the major indices could suffer a third consecutive day of losses. S&P 500 futures fell 0.2%, having already slipped on Monday – but rebounded sharply, which the SmartTrader community traded outstandingly. Markets remain volatile amid uncertainty over the economic impact of US tariffs. President Trump's last-minute decision to postpone tariffs on Mexico and Canada provided relief, but tensions continue as China retaliates with tariffs and levies on US coal, liquefied natural gas, crude oil, farm machinery and large vehicles. These new Chinese tariffs, due to come into effect on February 10, reignited fears of a prolonged trade conflict that could hurt corporate earnings and global growth. Investors are keeping a close eye on upcoming earnings reports from tech giants such as Alphabet, AMD and PayPal, as well as key US economic data such as new orders for factories and durable goods. The focus will also turn to Friday's US labor market report (NFP), which will provide further insight into the health of the labor market and influence the Federal Reserve's interest rate outlook.
► Asian markets rebounded as fears of an immediate trade war eased, following Trump’s decision to delay tariffs on Mexico and Canada. The Nikkei 225 in Japan gained 0.61%, recovering from steep losses in the prior session. Strong corporate earnings and positive economic data also supported the recovery, as investors hoped for continued policy support from the Bank of Japan amid global uncertainties. In Hong Kong, the Hang Seng Index surged 2%, reaching an eight-week high, driven by optimism that the US and China might reach a deal to avert additional tariffs. Chinese tech stocks led the gains, reflecting hopes for renewed stimulus measures from Beijing to offset the impact of US trade actions.
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