SENIOR MARKET ANALYST
01 Apr 2025
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The bulls found themselves in all sorts of trouble early Monday but managed to stage a fightback on Wall Street, reversing some of the recent declines. The Dow led the recovery, closing 1% higher, while the S&P 500 added 0.5%. However, the Nasdaq remained in the red, albeit modestly so, reflecting continued pressure on tech stocks.
Despite Monday’s rally, stocks ended the first quarter in negative territory, with the Nasdaq suffering the heaviest losses, down over 10%. This marked its worst quarterly performance since 2022, as tech shares bore the brunt of macroeconomic uncertainty and ongoing tariff concerns.
Overnight, the Reserve Bank of Australia (RBA) held interest rates steady, in line with expectations. The Australian market responded positively, with the ASX gaining around 1%. Other Asian Pacific stock indices followed suit, showing modest gains. Japan’s Nikkei steadied overnight, having closed 4% lower on Monday. But it remains under pressure and remains in correction territory.
European stock indices rallied sharply this morning, playing catch-up following Wall Street’s recovery yesterday afternoon and evening. The final Manufacturing PMI data was uniformly poor, coming in below expectations for all Eurozone countries and below 50, indicating contraction. The UK’s manufacturing sector was a touch better than expected, yet it, too, continues to contract.
Currency markets saw little action overnight, with most major pairs trading in a tight range. The US dollar remains on the back foot, though movements remain sluggish as traders wait for further clarity on tariffs and key economic data.
The Australian dollar emerged as the standout performer, finding strong support after the RBA’s rate decision. However, early gains evaporated as the European trading session progressed.
Safe-haven demand continues to fuel gold’s rally, with the precious metal surging 0.6% to yet another all-time high, just shy of $3,150. With no signs of slowing down, gold’s momentum appears unstoppable, potentially driven by a pre-tariff bid from investors seeking safety.
Silver also posted modest gains in early trade before dipping into negative territory once again. It remains overshadowed by its “big yellow brother”.
In energy markets, oil prices climbed for the ninth time in ten sessions as Russian supply concerns persist. WTI crude now trades in the mid-$71s, reflecting ongoing market tightness. Meanwhile, natural gas was little-changed in early trade.
Cryptocurrencies saw a positive session, with Bitcoin and Ethereum posting gains, as risk sentiment showed signs of stabilising.
The VIX edged higher by 1% overnight, holding just above the 21 level, signalling continued market uncertainty and elevated volatility.
A busy economic calendar awaits, with multiple key reports expected to drive market sentiment:
Beyond economic data, several headline-grabbing developments could impact sentiment:
The bulls put up a fight on Monday, attempting to regain lost ground after a difficult start to the session. However, tariff concerns continue to loom large, creating an overhang that could dictate near-term market direction.
Tomorrow’s expected tariff clarity may offer a lifeline for long positions, but until then, caution prevails. Gold remains the undisputed headline maker, continuing its relentless climb, while today’s jobs and ISM data will be closely monitored for further economic clues.
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