Global markets face a cautious start to the week as investors react to sudden policy reversals and uncertain trade dynamics driven by the US administration. Following US President Donald Trump’s abrupt backtrack on his threatened 50% tariff on European Union imports, markets in Britain and the US futures initially surged. However, this relief was tempered by concerns over the unpredictable nature of US trade policies, leaving investor confidence fragile and volatility elevated.
Highlights:
FTSE futures surged sharply post-US tariff reversal; Wall Street futures also signaled strong openings.
Asian equities declined Tuesday amid ongoing investor caution.
Trump’s tariff U-turn underscores unpredictability in US trade stance, dampening confidence in US economy.
Dollar Weakness Persists Amid Global Uncertainty
Despite the temporary reprieve in trade tensions, the US dollar remained near its lowest level in a month, facing pressure amid a broader risk-off environment. Positioned for a fifth consecutive monthly decline against a basket of major currencies, the dollar is on track for its longest losing streak since 2017. Market participants await critical economic indicators and policy signals later this week to gauge the Federal Reserve’s interest rate trajectory.
Highlights:
Dollar stuck near one-month low despite tariff news.
Set for a fifth straight monthly decline, longest since 2017.
Investors look ahead to key Fed speeches and core PCE inflation data this week.
Market Focus Shifts to Nvidia Earnings and Central Bank Events
With little economic data on Tuesday, investors’ attention turns to high-impact events scheduled later in the week. Nvidia, a bellwether for the AI sector, is expected to report a robust 65.9% revenue increase for Q1 on Wednesday. Wall Street will closely watch for commentary on the impact of tighter US export restrictions on its AI chip sales to China. Reports suggest Nvidia plans to launch a new lower-cost AI chipset for the Chinese market by June, navigating regulatory constraints.
Simultaneously, the Bank of Japan (BOJ) and its affiliated think-tank have commenced a two-day annual conference in Tokyo. Global central bankers will focus discussions on the dual challenges of slowing economic growth and persistent inflation, themes resonating across developed economies.
Highlights:
Nvidia Q1 earnings due Wednesday; expected 65.9% revenue growth amid US-China export curbs.
Nvidia to launch lower-priced AI chipset for China, with mass production slated for June.
BOJ-IMES annual conference begins in Tokyo, spotlighting growth and inflation challenges.
Additional Market Developments to Watch on Tuesday
French preliminary inflation data for May, which could provide early signals on Eurozone price pressures.
Bitcoin 2025 conference in Las Vegas, drawing attention to cryptocurrency developments and market sentiment.
Market Uncertainty Amid US Trade Policy Shifts
Global markets face cautious trading as unpredictable US trade policy shifts, particularly President Trump’s reversal on the threatened 50% tariff on the EU, fuel investor wariness. While European markets like the FTSE futures show initial strength after a long weekend, Asian stocks fell, reflecting hesitation amid fragile confidence in US economic policy. The US dollar remains weak, nearing a monthly low, signaling sustained uncertainty.
Market Drivers:
Unpredictable US Trade Policies: Trump’s erratic tariff decisions undermine investor confidence globally, keeping markets jittery.
Limited Data: With a quiet data calendar on Tuesday, investors await key events later in the week, including Nvidia’s earnings and US inflation data.
Focus on Tech & Fed: Nvidia’s upcoming earnings, expected to show strong AI revenue growth amid export curbs, and Federal Reserve speeches will be closely watched for policy direction.
Global Central Bank Concerns: The Bank of Japan conference highlights ongoing challenges of slow growth and persistent inflation, impacting global market sentiment.
Impact on Stock Market & Investors:
Increased Volatility: Unpredictability in US trade policy and mixed global cues may lead to heightened market swings in the near term.
Cautious Positioning: Investors may adopt a wait-and-watch stance until clearer signals emerge from corporate earnings and central bank communications.
Tech Sector Focus: Nvidia’s earnings will be a key indicator for tech stocks and AI-related segments, influencing broader market trends.
Currency Pressure: Weakness in the US dollar may impact multinational companies and commodity-linked stocks.
Investor Focus Points:
Monitor developments in US trade policies and tariff decisions for potential market-moving impacts.
Track Nvidia’s Q1 earnings for insights into AI chip demand and the impact of export restrictions on China.
Follow Federal Reserve and Bank of Japan communications for clues on interest rate trajectories and inflation outlooks.
Stay alert to currency movements, especially the US dollar’s performance against major currencies.
Observe global inflation data, including France’s preliminary figures, for broader economic cues.
Highlights:
Trump’s tariff U-turn sparks cautious market reaction
Asian stocks dip; FTSE futures strong after holiday
Nvidia earnings and Fed speeches eyed this week
BOJ conference spotlights growth and inflation concerns
US dollar near lowest level in a month, pressure persists
