US markets kicked off with major indexes climbing despite ongoing concerns over trade tensions and inflation. The S&P 500 posted solid gains, while the Nasdaq surged nearly 1% as technology and industrial stocks saw strong buying interest. Investors remained focused on key earnings reports and sector performance, even as President Trump’s latest announcement of a 25% tariff on steel and aluminium imports added to policy uncertainty. While volatility persists, traders are closely watching upcoming economic data releases, including inflation figures and Federal Reserve Chair Jerome Powell’s congressional testimony, for further insights into the market’s direction.

Key Takeaways:

  • S&P 500 Posts Strong Gain as Nasdaq Jumps Nearly 1%: The S&P 500 climbed 0.67%, closing at 6,066.44, as markets shrugged off fears over President Trump’s latest announcement of a 25% tariff on steel and aluminium imports. The Nasdaq Composite climbed 0.98% to 19,714.27, leading the market higher as major tech names posted strong gains. Alphabet, Amazon, and Microsoft all advanced, while semiconductor stocks also saw strong buying interest.
  • Dow Jones Rises 167 Points as McDonald’s Leads Gains: The Dow Jones Industrial Average gained 167.01 points, or 0.38%, to end at 44,470.41, with McDonald’s surging 4.8% after reporting stronger-than-expected comparable sales growth for Q4. Despite lingering concerns over trade tensions, broad-based strength in industrial and consumer stocks helped the index recover from last week’s losses.
  • Steel and Aluminium Stocks Rally Following Trump’s Tariff Plans: US steel and aluminium producers saw sharp gains after President Trump confirmed plans to impose a 25% tariff on all steel and aluminium imports. Cleveland-Cliffs soared nearly 18%, while Nucor gained 5.6% and US Steel jumped 4.8%. Alcoa also closed 2.2% higher as investors bet on a stronger domestic steel industry following the proposed trade policy shift.
  • European Markets and Bond Yields Move Higher Despite Tariff Fears: European stock markets closed at record highs, with the pan-European Stoxx 600 rising 0.58% to 545.92 points. The FTSE 100 climbed 0.77% to 8,767.80, while the CAC 40 gained 0.4% to 8,006, rebounding from the previous session’s decline. Germany’s DAX Index advanced 0.57%, adding 125 points, while Italy’s FTSE MIB rose 0.50%. Meanwhile, European bond yields declined, with the 10-year German bund yield down 2.2 basis points to 2.350% and the 10-year UK gilt yield falling 4.4 basis points to 4.432%. The Eurozone Sentix investor confidence index rose 5.0 points to -12.7, reaching a seven-month high and exceeding expectations of -16.5.
  • Asia-Pacific Markets Mixed as Trade Tensions Keep Investors Cautious: Stock markets in Asia showed mixed movements as investors assessed the impact of Trump’s tariff plans. Japan’s Nikkei 225 ended flat at 38,801.17, while the Topix Index slipped 0.15% to 2,733.01. In China, the CSI 300 Index erased early losses to close 0.21% higher at 3,901.06, while the Hang Seng Index in Hong Kong surged 1.76% in late trading. South Korea’s Kospi finished flat at 2,521.27, while the small-cap Kosdaq rose 0.91% to 749.67. Australia’s S&P/ASX 200 declined 0.34% to 8,482.80, as concerns over global trade weighed on sentiment.
  • US Treasury Yields Edge Higher Ahead of Economic Data: The 10-year Treasury yield rose nearly 2 basis points to 4.503%, while the 2-year Treasury yield held steady at 4.277%. Investors are closely watching upcoming economic reports, including the Consumer Price Index (CPI) due Wednesday and Federal Reserve Chair Jerome Powell’s congressional testimony on Tuesday and Wednesday, which could provide more clarity on the central bank’s next moves.
  • Oil Prices Rebound Amid Tariff Uncertainty and Supply Concerns: Oil markets recovered after last week’s declines, with Brent crude futures rising $1.21 (1.62%) to close at $75.87 per barrel. West Texas Intermediate (WTI) crude gained $1.32 (1.86%), settling at $72.32 per barrel. While markets remain cautious about a potential trade war, investors focused on broader supply-demand factors and the possibility of waivers for US crude exports to China.

FX Today:

  • Euro Struggles as Traders Digest Tariff Risks: The Euro weakened against the US dollar on Monday, with EUR/USD closing at 1.0306, down 0.19% for the day. The pair attempted to gain momentum, reaching an intraday high of 1.0336 before retreating. Resistance remains strong at 1.0400, marked by the 50-day moving average, while the 100-day and 200-day moving averages at 1.0614 and 1.0754 suggest a longer-term bearish trend. If selling pressure continues, the pair could test support at 1.0280, with a further drop potentially exposing 1.0250. A move above 1.0350 would be required to challenge 1.0400 resistance and shift the short-term outlook.
  • Pound Remains Under Pressure Below 1.2400: The British Pound struggled to maintain strength, with GBP/USD closing at 1.2364, a 0.28% decline for the session. After briefly touching a high of 1.2422, the pair lost momentum amid cautious sentiment surrounding global trade tensions. The 50-day moving average at 1.2490 remains a significant barrier, while the broader trend remains bearish, with the 100-day and 200-day moving averages sitting at 1.2730 and 1.2788. If the pound fails to break above 1.2400, further downside could push the pair toward the 1.2300 support zone, with 1.2250 acting as a key level should selling intensify. A push past 1.2450 would be needed to shift sentiment toward a recovery.
  • Dollar Rebounds Against Yen After Recent Lows: The USD/JPY pair advanced on Monday, closing at 152.01, up 0.41% for the day. After touching a low of 151.17. The 50-day moving average at 154.80 acts as a major resistance point, while the 100-day and 200-day moving averages, at 152.68 and 152.70, suggest the broader trend remains bullish despite recent pullbacks. If USD/JPY continues to climb, resistance at 153.00 could be the next key level, with a breakout potentially leading to a retest of the 154.50 resistance zone. However, a drop below 151.50 could trigger a deeper correction toward 150.50.
  • Swiss Franc Weakens as USD/CHF Climbs: The US dollar extended gains against the Swiss Franc, with USD/CHF closing at 0.9114, up 0.28% for the session. The pair briefly touched a session high of 0.9121 before pulling back slightly. The 50-day moving average at 0.9000 continues to act as strong support, while the 100-day and 200-day moving averages at 0.8883 and 0.8828 confirm the overall bullish trend. Holding above 0.9100 could open the door for a rally toward 0.9150 and potentially 0.9200. On the downside, initial support lies at 0.9050, with a break lower exposing the 0.9000 level.
  • Australian Dollar Finds Buyers Despite Market Uncertainty: The Australian dollar edged higher against the US dollar, with AUD/USD closing at 0.6278, rising 0.26% on the day. The pair tested resistance at 0.6287 but lacked strong upside momentum. The 50-day moving average at 0.6279 acts as an immediate pivot level, while the broader trend remains bearish, with the 100-day and 200-day moving averages at 0.6467 and 0.6564 sitting well above current levels. A sustained break above 0.6300 could push the pair toward 0.6350, while a failure to hold gains may lead to a retest of 0.6230, with 0.6200 as the next downside target.
  • Gold Surges Past $2,900 as Trade Fears Boost Safe-Haven Demand: Gold prices saw a sharp rally on Monday, climbing 1.56% to close at $2,904. The precious metal reached an intraday high of $2,911, benefiting from increased demand for safe-haven assets amid concerns over US trade policies and inflation. Support remains strong at $2,854, while the 50-day moving average at $2,696 continues to provide a foundation for buyers. Additional support from the 100-day and 200-day moving averages at $2,682 and $2,547 further reinforces the bullish trend. If gold maintains its momentum, resistance at $2,950 could be tested. However, a dip below $2,880 may lead to a correction toward $2,850, aligning with the short-term support zone.

Market Movers:

  • Axsome Therapeutics Skyrockets After Settlement Agreement: Axsome Therapeutics (AXSM) saw a sharp rally, closing up more than 20%, after the company announced a settlement agreement with Teva Pharmaceuticals to resolve patent litigation. 
  • Rockwell Automation jumps on strong earnings: Rockwell Automation (ROK) surged 12%, leading gainers in the S&P 500, after reporting Q1 adjusted earnings per share of 1.83, well above the consensus estimate of 1.56. 
  • Monday.com Soars as Quarterly Results Beat Expectations: Shares of Monday.com (MNDY) surged 26% after the company reported Q4 earnings per share of 43 cents, significantly exceeding analysts’ expectations of 15 cents. 
  • Uber rallies as hedge fund stake drives confidence: Uber Technologies (UBER) extended last week’s gains, climbing more than 5% on Monday. The rally followed news that Pershing Square Capital Management had acquired a 30.3 million-share stake in the company. 
  • Semtech Crashes as Guidance Disappoints: Semtech (SMTC) plunged more than 30% after the company warned that 2026 net sales of its CopperEdge products would be lower than previously estimated. The weaker forecast stemmed from anticipated changes in rack architecture, sparking a heavy sell-off.

As the week begins, investors remain focused on the implications of President Trump’s tariff announcement, with steel and aluminium stocks surging while broader markets showed resilience. Treasury yields edged higher ahead of key economic data releases, including the upcoming Consumer Price Index report and Federal Reserve Chair Jerome Powell’s testimony before Congress. Meanwhile, oil prices rebounded as markets steadied after last week’s decline, and Gold surged past $2,900 as investors sought safe-haven assets. With crucial economic reports and policy statements on the horizon, traders remain careful about potential market volatility in the days ahead.