SENIOR MARKET ANALYST
28 Feb 2025 - 2min Read
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Trump’s postponed tariff threats on Canada and Mexico are due to kick in on Tuesday, and investors are reacting accordingly. All the major stock indices ended yesterday’s session significantly lower. The tech sector bore the heaviest losses, with Nvidia tumbling 8% post-earnings, dragging the Nasdaq down 7.3% from its February 19th peak—the fastest decline since September 2020.
The selloff wasn’t contained to the US, as Asian markets followed suit, closing the week deep in the red. Hong Kong’s Hang Seng dropped over 3%, with Japan’s Nikkei not far behind. Investors are now looking ahead to key Chinese manufacturing data due over the weekend.
Meanwhile, risk-off sentiment has pressured commodities, with gold retreating from record highs and oil giving back recent gains.
Crypto markets are also in freefall, with Bitcoin plunging below $80K amid intensified regulatory concerns. With today’s key Core PCE inflation number in focus, investors are bracing for another volatile trading session.
Asian markets closed the week deep in negative territory, weighed down by the weak US session. Hong Kong’s Hang Seng dropped over 3%, with Japan’s Nikkei not far behind. Investors are now looking ahead to key Chinese manufacturing data due over the weekend.
European indices opened lower, with the auto sector in sharp focus following Trump’s tariff threats. IAG bucked the trend, jumping on an earnings beat.
In the FX market, the US dollar strengthened, while the Japanese yen lagged after a weaker-than-expected inflation print from Tokyo. Currency traders remain on alert as geopolitical and economic risks unfold.
Gold extended its decline, retreating further from recent record highs and posting its worst weekly drop since November. Silver followed suit and remains under selling pressure.
After rallying on Thursday, oil pulled back again as risk aversion set in and concerns over Trump’s economic policies weighed on sentiment. WTI crude traded in the mid-$69 range, while natural gas remained flat.
Cryptocurrency markets continued their sharp selloff, with Bitcoin falling below $80K to a three-month low. Ethereum suffered even deeper losses. The sector was further jolted by the SEC’s comments suggesting that most meme coins do not qualify as securities.
The VIX, a key measure of market volatility, climbed to the mid-19s, flashing amber and signalling growing investor nervousness.
The tech sector’s sharp pullback, led by Nvidia, has spooked investors, yet the AI boom remains intact. While the bears hold control for now, the market’s reaction may be exaggerated as the initial enthusiasm around Trump’s promises of tax cuts and deregulation temporarily cools.
Crypto remains the standout story, with the ongoing selloff presenting a possible dip-buying opportunity for risk-tolerant traders.
All eyes are now on today’s PCE data—the Fed’s preferred inflation measure—which could provide a clearer direction for markets. The bulls are hoping for a favourable outcome.
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