As April 2 approaches, the U.S. market is nervously awaiting the implementation of new tariff policies. On Thursday, Trump once again threatened tariffs, stating that his auto tariffs not only target traditional car-exporting giants such as the EU and Japan but also included a tough statement that 'if Canada and the EU join forces against us, we will further increase the tariff levels.'#关税政策
U.S. stock indices fell across the board.
The S&P 500 index closed down 0.33%. The Dow Jones Industrial Average closed down 0.37%. The Nasdaq closed down 0.53%. The Nasdaq 100 closed down 0.59%.
The Nasdaq Technology Market Capitalization Weighted Index (NDXTMC), which measures the performance of the Nasdaq 100 technology stocks, closed down 1.43%.
The Russell 2000 small-cap index closed down 0.39%. The VIX volatility index closed up 1.96%, at 18.69.
The market is concerned about escalating trade tensions, and under the resonance of risk aversion and inflation expectations, the precious metals sector strengthened collectively. Spot gold broke through $3,060 during trading, reaching a historic high, while silver also surpassed $34. European and American stock markets continued to decline, with U.S. stocks diving at the end of trading, and European and American car manufacturers all fell, with funds clearly flowing back to defensive assets. Investor expectations of 'trade conflict + imported inflation' are heating up, leading to an increase in long-term U.S. Treasury yields and a steepening yield curve.
The dollar fell instead of rising, nearly giving back all of the previous day's gains, with the pound and euro leading the way. Due to escalating trade tensions between Canada and the U.S., the Canadian dollar came under pressure. The Premier of Ontario and the Canadian Finance Minister reached a consensus to refrain from implementing retaliatory measures before April 2, leaving the market in a state of 'waiting for the U.S. to make the first move.' There are no new signs of escalation in the Middle East and Ukraine situations, and oil prices rose slightly.
The United States still faces a situation of 'strong hard data and weak soft sentiment.' The final GDP value for the fourth quarter was revised up to 2.4%, slightly higher than the previously announced 2.3%. However, consumer spending, which accounts for two-thirds of GDP, was downgraded from 4.2% to 4.0%. Considering the low consumption base in Q1 and the rise in uncertainty, the consumption side may face certain pressures. The core PCE price index was revised down to 2.6%, reflecting a slowdown in price growth.
For the week ending March 22, the number of initial unemployment claims in the U.S. was 224,000, nearly unchanged from the previous value, with the four-week average slightly declining, and the number of continuing unemployment claims was below expectations. Analysts pointed out that several hiring and layoff indicators have begun to deteriorate recently, and unemployment claims may rise in the coming weeks. In February, the number of pending home sales increased by 2% month-over-month, exceeding expectations and reversing January's 4.6% decline. The Chief Economist of NAR stated that although the February contract data rebounded, the overall situation remains weak, and if mortgage rates decline significantly, both demand and supply for home purchases could benefit.
Regarding the Federal Reserve, Richmond Fed President Barkin stated that the Fed is waiting for uncertainty to settle before deciding to take action. The market is focused on the February PCE inflation data and the final consumer confidence index from the University of Michigan, which will be released this Friday. Fed Chair Powell previously hinted that the year-on-year PCE inflation could be 2.5%, and the core PCE could rise to 2.8%. If the data continues to be strong, it may delay market expectations for interest rate cuts.