Markets Mixed as Investors React to Trump's Increased Metal Tariffs

US stock indices fluctuated between modest gains and losses on Tuesday as Federal Reserve Chair Jerome Powell reiterated that the central bank is not in a hurry to cut interest rates. He reaffirmed the commitment made during the January Federal Open Market Committee meeting when the bank paused its rate-cutting cycle. Meanwhile, President Donald Trump issued an executive order to impose a 25% tariff on imports of steel and aluminum as part of his administration's trade policy aimed at protecting US industries and jobs. The decision sparked widespread debate as the tariff, imposed without exemption, applied to all countries, including key US allies like Canada, Mexico, and European nations, which are major suppliers of steel and aluminum to the US. Additionally, many feared it would provoke retaliatory tariffs from affected countries, escalating into a broader trade war.

In Europe, stocks closed significantly higher on Tuesday, continuing their upward momentum, as strong corporate earnings reinforced the perception that European equities offered better value than their North American counterparts. Investors also assessed the potential impact of new US tariffs on European multinational firms. The Eurozone’s STOXX 50 gained 0.60% to reach 5 392, its highest level since 2000, while the STOXX 600 climbed 0.30% to a record 547.

In Asia, the Hang Seng Index dropped 227 points, or roughly 1%, to 21 295, marking its first decline in four sessions amid a slump in US futures ahead of key US inflation data later in the week. Sentiment weakened further after President Trump signed an order on Monday to impose a 25% tariff on steel imports and increase aluminum tariffs from 10% to 25%, effective 4 March 2025. Meanwhile, Japan’s Nikkei edged up 0.04%, as global market sentiment remained cautious.

The FTSE/JSE All Share Index traded at 12 541 points on Tuesday, decreasing 0.23% since the previous trading session, while the rand strengthened to R18.45 against the US dollar.

Brent crude oil futures climbed toward $77 per barrel on Tuesday, building on a more than 1% gain from the previous session. The increase was driven by signs of tightening Russian supply and growing supply risks. Reports indicated that Russian oil production fell further below its OPEC+ quota in January, while new US sanctions targeted individuals and tankers transporting Iranian crude to China in an effort to pressure Tehran.



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