General Market Analysis – 25/03/25

Stocks Drive Higher on Tariff Optimism – Nasdaq Surges Over 2%

US stocks pushed higher on the first trading day of the week yesterday as investors reacted with greater optimism to President Trump’s more focused tariff proposals. The Dow gained 1.42%, the S&P 1.76%, and mega caps helped the Nasdaq drive 2.27% higher. US Treasury yields also rose on the back of the tariff news, with the 10-year hitting a six-day high. They closed 8.8 basis points higher at 4.335%, while the 2-year added 8.6 basis points to move up to 4.335%. The dollar gained ground against most of the majors, with USD/JPY notably pushing back above the 150.00 level as the DXY increased by 0.17% to 104.33. Oil prices rose again after President Trump advised that he would place tariffs on any country buying oil or gas from Venezuela, with Brent up 1.30% to $73.10 and WTI up 1.22% to $69.11. Gold drifted lower again due to the stronger dollar, dropping 0.35% on the day to close at $3,012.71.

Black Gold on the Move – and More to Come

Oil prices have experienced significant volatility in the first quarter of 2025, and traders anticipate further movement as the year progresses, with the potential for large percentage gains or losses depending on how certain geopolitical issues unfold. President Trump’s call yesterday to place tariffs on any country purchasing oil or gas from Venezuela could see last night’s rise continue for a few sessions, particularly with major consumers such as China and India on that list. Additional pressure on Iran could also affect the supply side. However, there is some balance from the US, with the potential for a ceasefire in Ukraine leading to the return of Russian oil to the market, which could push prices lower, as could OPEC+ production increases. As always with geopolitical influences on markets, there are many moving parts, and updates can lead to more volatility rather than fundamental trends. Many expect choppy conditions to persist until any form of certainty returns.

Quieter Trading Day Ahead for Investors

Wall Street kicked off the trading week in positive form yesterday, with all three major indices pushing strongly higher on the back of increased optimism regarding US tariffs after President Trump pledged a more targeted approach on Friday. Today is expected to be a quieter day on the macroeconomic event calendar following yesterday’s raft of PMI numbers, but traders still anticipate further movement across financial products. There is little scheduled for the Asian session today, although yen traders will monitor the Monetary Policy Meeting Minutes from the Bank of Japan midway through the morning. The European session sees the release of the latest German IFO Business Climate data, which could lead to some movement in the euro. A few tier-two numbers are also due for release from the US once New York opens. CB Consumer Confidence data is likely the main attraction, with New Home Sales and the Richmond Manufacturing Index also potential market movers. However, in the current environment, most traders expect updates on tariffs from the President to have a greater impact.

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