US stocks edged higher on Tuesday, extending gains from the previous session as hopes grew that upcoming tariffs from the Trump administration would be narrower in scope. Investors largely shrugged off a steep drop in consumer confidence, instead focusing on the potential for softer trade measures. Meanwhile, European and Asian markets posted mixed performances, and US Treasury yields dipped as concerns over economic growth resurfaced. Attention now turns to upcoming economic data, including GDP and the Fed’s preferred inflation gauge, due later this week.

Key Takeaways:

  • S&P 500 Rises for Third Straight Session as Gains Moderate: The S&P 500 added 0.16% to close at 5,776.65, marking its third consecutive daily gain. The index built on Monday’s rally, which was fuelled by optimism around potential tariff relief, though upside was capped by lingering macroeconomic uncertainty and weak consumer data.
  • Nasdaq Advances as Tech Stocks Remain Resilient: The Nasdaq Composite gained 0.46% to finish at 18,271.86. Technology stocks outperformed, helping lift the broader index despite cautious sentiment across other sectors. Gains were led by large-cap names, as investors remained optimistic about AI-driven earnings growth.
  • Dow Inches Higher Amid Tariff Optimism: The Dow Jones Industrial Average added just 4.18 points, or 0.01%, closing at 42,587.50. The muted move came as investors weighed the prospect of sector-specific tariff exemptions. Comments from President Trump that he may “give a lot of countries breaks” helped ease concerns over trade disruption.
  • European Markets Rally on Tariff Relief Hopes and Bayer Rebound: European equities advanced on Tuesday as optimism grew that US tariffs would be narrower in scope. The Stoxx 600 index rose 0.67%, with all major bourses finishing in positive territory. Germany’s DAX led gains, climbing 1.13% after the March IFO business climate index rose to an 8-month high of 86.7, in line with expectations. France’s CAC 40 added 1.03%, and Italy’s FTSE MIB gained 1.06%. The UK’s FTSE 100 rose 0.30%, or 25.79 points. Biotech firm Bayer surged over 5% following a sharp decline the day before, after investors reassessed the impact of a US court ruling. SAP extended gains as Europe’s most valuable company, rising 1.3%. Shell climbed 1.5% after announcing plans to boost investor returns and double down on LNG. European bond yields moved higher, with the 10-year German bund yield up 3.4 basis points to 2.806%, and the UK gilt yield rising to a 1.5-week high of 4.747%.
  • Asia-Pacific Markets Mixed as Hong Kong Leads Declines on Tariff Concerns: Asia-Pacific markets closed mixed on Tuesday as investors evaluated the potential impact of US tariff threats. Hong Kong’s Hang Seng Index dropped 2.35% to 23,344.25, while the tech-heavy Hang Seng Tech Index slumped 3.82%, reflecting sensitivity to trade-related headlines. China’s CSI 300 finished flat at 3,932.30 amid cautious sentiment. In Japan, the Nikkei 225 rose 0.46% to 37,780.54, supported by gains in equities and bond market movements. The Topix gained 0.24%, while yields on Japanese 5-year and 10-year government bonds rose to their highest levels since 2008. South Korea’s Kospi declined 0.62%, and the small-cap Kosdaq lost 1.24%. In Australia, the S&P/ASX 200 ended flat at 7,942.50 as investors awaited the evening release of the federal budget by Treasurer Jim Chalmers. India’s Nifty 50 rose 0.32%, while the Sensex traded near flat levels in mid-afternoon trade.
  • US Consumer Confidence Sinks to 12-Year Low, Home Prices Edge Higher: The Conference Board’s consumer confidence index fell to 92.9 in March, missing expectations and marking its lowest level in four months. The expectations component dropped to 65.2, the weakest since 2012. In housing, January’s Case-Shiller 20-city index showed prices up 4.7% year-over-year, slightly above forecasts, though monthly growth remained sluggish at just 0.1%.
  • US Treasury Yields Ease as Growth Worries Persist: The 10-year Treasury yield fell 1.4 basis points to 4.317% after initially rising on tariff optimism. The 2-year yield dropped 2 basis points to 4.017%. The decline in yields followed the weak consumer sentiment data, adding to market expectations that economic momentum may be slowing ahead of key inflation data later this week.
  • Oil Prices Hold Steady over US Sanctions on Venezuelan Oil : Brent crude rose 0.16% to close at $73.13 per barrel, while WTI settled flat at $69.11. Markets digested news of a possible truce between Russia and Ukraine over Black Sea trade routes, though concerns over US sanctions on Venezuelan oil buyers kept prices supported. OPEC+ is expected to maintain its current output plans into May.

FX Today:

  • Gold Gains as Yields Drop and Inflation Worries Linger: Gold closed at $3,019.38, up 0.28%, supported by a pullback in US Treasury yields and renewed concerns over inflation. The yellow metal remains in a bullish trend, consolidating just below key resistance at $3,050. Rising inflation expectations, partly driven by tariff uncertainty, continue to drive demand for bullion. Support remains firm at $3,000, where buyers have consistently stepped in, with further downside protected by the 50-day SMA near $2,881. A breakout above $3,050 could open the door to $3,100 in the coming sessions.
  • USD/JPY Retreats as 151.00 Resistance Holds Firm: USD/JPY slipped 0.51% to 149.93 after failing to breach the critical 151.00 barrier, which coincides with a cluster of long-term moving averages. The rejection marked the pair’s first meaningful pullback in over a week, hinting at growing caution among yen sellers. Technical indicators show neutral-to-bearish momentum unless the pair can decisively break above 151.80. Support lies between 148.70 and 149.00, a zone that has held during recent retracements. The 200-day SMA at 151.73 remains a major ceiling, keeping upside potential in check for now.
  • GBP/USD Holds Steady Above 1.2900, Eyes Breakout: GBP/USD rose 0.18% to settle at 1.2946, staying near the top of its recent range as buyers defended support at 1.2900. The pair has built a steady uptrend since early February, underpinned by rising moving averages and sustained higher lows. A daily close above 1.3000 would signal a bullish breakout and target the 1.3150 zone. Downside remains protected by the 200-day SMA at 1.2800, with immediate support at 1.2850. As long as price remains above 1.2900, the broader technical structure suggests potential for continued upside.
  • EUR/USD Consolidates Near 1.0800 Amid Waning Momentum: EUR/USD finished at 1.0795, slipping 0.05%, as the pair continued to trade in a narrow range following its March rally. Buyers stepped in near 1.0780, just above the 200-day SMA at 1.0729, helping to contain losses for now. While the short-term trend has weakened slightly, the broader outlook remains constructive as long as support near 1.0700 holds. A push above 1.0880 would open the door to retest March highs near 1.0950. The technical picture remains neutral-to-bullish, though further consolidation is likely without a clear macro catalyst.
  • AUD/USD Edges Higher After Holding Key Technical Support: AUD/USD closed at 0.6300, up 0.23%, bouncing from an intraday low of 0.6277. The pair continues to grind higher after finding support at the 50-day SMA, currently at 0.6290. Resistance looms at the 100-day SMA near 0.6338, which has capped upside attempts multiple times in March. Broader price action remains trapped in a 200-pip range, with no breakout in sight until price clears either 0.6350 or drops below 0.6250. Despite a downward-sloping 200-day SMA, recent higher lows suggest a base may be forming for a possible trend shift.

Market Movers:

  • KB Home Slides After Q1 Miss and Weaker Outlook: KB Home shares fell 5.2% after the company reported earnings of $1.49 per share on $1.39 billion in revenue, missing Wall Street forecasts. Analysts had expected $1.58 EPS on $1.5 billion in revenue. 
  • Oklo Tumbles on Annual Loss and Financial Warnings: Oklo dropped 6.4% after reporting a wider full-year loss compared with the previous year. The nuclear technology firm also warned that it expects “significant expenses and continuing financial losses.” 
  • CrowdStrike Gains on BTIG Upgrade and Forecast Visibility: CrowdStrike shares rose more than 3% after BTIG upgraded the stock to buy from neutral. The firm said the company now has “much better visibility” on forward guidance following the IT outage last year. 
  • Mobileye Pops on Volkswagen Autonomous Driving Partnership: Mobileye shares surged 8.7% following news of a new collaboration with Volkswagen. The two companies will work together to develop advanced driver-assistance and autonomous driving systems. 
  • Crown Castle Declines on Sudden CEO Termination: Crown Castle dropped 3.7% after its board of directors announced the immediate termination of CEO Steven Moskowitz. CFO Dan Schlanger was named interim CEO during the leadership transition. 
  • Cloudflare Rises on Bank of America Upgrade to Buy: Shares of Cloudflare gained more than 2% after Bank of America upgraded the stock to buy from underperform. The bank said the company’s fundamentals are improving and highlighted its AI exposure. 

US equities inched higher on Tuesday, extending a rebound as investors grew more hopeful that upcoming tariffs would be selectively applied. While sentiment was weighed down by a steep drop in consumer confidence, gains in tech stocks and easing trade fears kept indices in positive territory. European and Asian markets reflected the mixed global mood, while falling Treasury yields pointed to investor caution ahead of key economic releases. With GDP, inflation, and jobs data on the horizon, traders will be watching closely for fresh signs of direction in both policy and growth outlook.