Forex Analysis & Reviews: 27.03.2025 - Stakes rise: GameStop bets...

27.03.2025 12:15 PM

Stakes rise: GameStop bets on crypto, Trump on tariffs

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Trump is expected to unveil new auto tariffs soon, according to reports. Dollar Tree advanced on news of divesting its Family Dollar unit. GameStop climbed on its Bitcoin holdings and a better-than-expected fourth-quarter profit. The Nikkei fell by 1%, South Korean equities declined by 1.3%, while Hong Kong stocks moved higher and the dollar retreated from a three-week high. Barclays has lowered its 2025 target for the S&P 500. At Wednesday's close, the S&P 500 fell by 1.12%, the Nasdaq dropped by 2.04%, and the Dow declined by 0.31%.

Markets shaken as stocks slide amid tariff uncertainty

US stock indices posted sharp declines on Wednesday, driven largely by a sell-off in technology firms and automakers. Investors remain on edge ahead of a long-anticipated announcement from President Trump regarding tariffs on auto imports, a measure that could rattle global markets.

Trump on the verge of escalating trade tensions

As anticipation builds around possible White House tariffs, investors rushed to offload equities. President Trump was expected to hold a press conference on Wednesday to reveal new restrictions targeting foreign-made automobiles. This move, in line with his protectionist agenda, risks further destabilizing international economic relations.

Auto analysts have warned that the tariffs could spark sharp increases in vehicle prices and production disruptions. For several weeks, Trump has hinted at retaliatory measures set to take effect on April 2.

Tesla and GM under pressure as investor anxiety grows

Wavering sentiment and uncertainty took a toll. Tesla shares plunged by 5.6%, while General Motors fell by 3.1%. Financial markets are not only concerned about the scale of the tariffs but also about potential retaliatory actions by other nations. Reciprocal measures could strain global supply chains and dampen consumer demand.

Chip sector hit hard as tech stocks slide

Technology was not spared from the sell-off. Semiconductor stocks tumbled, with Nvidia losing nearly 6% and Broadcom down almost 5%. This dragged the PHLX Semiconductor Index down by 3.3%. The sector remains especially vulnerable to economic headwinds, given its reliance on international trade and consistent demand for electronics.

Indices deep in the red as Wall Street struggles

Major US indices closed the session sharply lower. The S&P 500 dropped 1.12% to close at 5,712.20. The Nasdaq fell by 2.04% to 17,899.02, while the more resilient Dow slipped 0.31% to 42,454.79. Once again, the stock market demonstrated its vulnerability to geopolitical risks and policy shifts.

Tech and telecom among the day's worst performers

Of the 11 key S&P 500 sectors, more than half finished the day in negative territory. Information technology was the worst performer, falling 2.46% amid heightened anxiety over economic and geopolitical risks. Telecommunications also declined by 2.04%. Investors continue to exit risk assets, wary of potential fallout from trade restrictions.

Business sentiment wanes amid global uncertainty

As global instability deepens, corporate America is growing increasingly skeptical. A recent survey of senior executives shows declining optimism in the first quarter, with most respondents citing trade policy uncertainty and inflationary pressures as the primary causes for concern.

Companies stockpile ahead of tariffs, boosting statistical data

Fearing rising costs from new tariffs, US firms have begun stockpiling goods. This behavior has already affected data, with last month showing a surprise increase in durable goods orders. However, analysts caution that the rise reflects precautionary hoarding rather than actual demand growth.

Barclays lowers S&P 500 target amid market pressure

Investment bank Barclays has revised its S&P 500 target to 5,900 points, down from a previous estimate of 6,600. Since the beginning of 2025, the index has declined by approximately 3%, while the tech-heavy Nasdaq has lost more than 7%, highlighting the severity of current market stress.

All eyes on PCE inflation report

Markets now turn their attention to the upcoming release of the Personal Consumption Expenditures (PCE) index, which is considered the Federal Reserve's preferred gauge of inflation. The report, due Friday, could influence the central bank's next steps in monetary policy.

Kashkari issues warning: tariffs could fuel inflation

Neel Kashkari, President of the Federal Reserve Bank of Minneapolis, raised concerns over President Trump's tariff strategy. He cautioned that such measures could worsen inflation, not alleviate economic stress. Kashkari also suggested that the Fed might need to tighten monetary policy in response, potentially raising interest rates.

Dollar Tree advances on potential sale of Family Dollar

Amid overall market volatility, Dollar Tree delivered one of the few bright spots. Shares rose by 3.1% following news of negotiations to sell its Family Dollar unit to a private equity consortium. The deal could be worth up to $1 billion, offering hope to investors.

GameStop bets on Bitcoin, shares soar

GameStop shares jumped nearly 12% after the board of directors announced the inclusion of Bitcoin in the company's treasury reserves. The decision represents an attempt to modernize corporate finance and attract cryptocurrency-savvy investors.

Asian markets spooked by Trump's tariff plan

Global equity markets continued to slide Thursday, led by declines in Asia. President Trump's late-Wednesday announcement of a 25-percent auto tariff rattled regional indices, with Japan and South Korea bearing the brunt.

Analysts have warned that these measures will hit European and East Asian automakers hardest, posing a direct threat to brands like Toyota, BMW, and Hyundai, all of which have a strong presence in the US market.

Nikkei and KOSPI fall as auto sector suffers losses

Japan's Nikkei index fell 1%, while South Korea's KOSPI declined 1.3%. Carmakers were hit hardest, with Toyota down 2.6% and Mazda and Subaru falling approximately 6% each. The market reacted instantly to fears of reduced US auto exports.

European traders brace for weak open

European sentiment also turned negative. Futures on the STOXX 50 index dropped by 0.5%, while FTSE futures slipped 0.2%. Investors are preparing for a subdued trading session amid escalating trade tensions.

Tariff softening and TikTok deal: Trump seeks compromise

Despite the tough stance, Trump has signaled that retaliatory tariffs on other countries may be softer than expected. Regarding China, the President suggested there could be tariff relief in exchange for a TikTok deal, as the app remains a focal point in US-China tech tensions.

Chinese markets buck global trend

China's equity market showed resilience. The CSI 300 index of blue-chip stocks rose by 0.4%, while Hong Kong's Hang Seng advanced by 1%. The electric vehicle sector led the rally, with shares of BYD up by 2.3%.

Asia-Pacific index ex-Japan holds steady

Thanks to gains in China and Hong Kong, the broader MSCI Asia-Pacific Index excluding Japan remained flat, helping to offset losses driven by Japan's economic downturn.

Wall Street futures rebound but remain fragile

US stock futures rose slightly by 0.1%, recovering from the previous day's plunge. However, market optimism remains cautious amid persistent investor concern over trade restrictions. The Nasdaq, in particular, fell by more than 2% on Wednesday, underscoring the fragile state of market sentiment.

US automakers lose ground after tariff announcement

Following Trump's tariff announcement, US automakers faced significant losses. General Motors fell by 6%, while Ford dropped nearly 5%. Investors are concerned that the move will raise vehicle prices and suppress demand.

Global response: Japan and Canada signal retaliation

International responses were swift. Japanese Prime Minister Shigeru Ishiba stated that Tokyo is considering all options in response to the new tariffs, potentially escalating tensions between the two economies. Canada also warned that it is prepared to implement retaliatory tariffs unless the US revises its position. The European Union expressed regret and said it would pursue diplomatic negotiations.

Dollar strengthens as global risks rise

The US dollar strengthened on heightened risk aversion. The dollar index briefly touched a three-week high of 104.71 during overnight trading, before settling 0.3% lower at 104.32. The dollar's appeal has increased amid growing global uncertainty and the prospect of trade wars.

Euro and yen regain ground amid high volatility

Volatility remained elevated in currency markets. The euro fell to a three-week low of $1.0731 but later rebounded 0.3% to $1.0780 after holding above its 200-day moving average. The Japanese yen recovered 0.2% to 150.21 per dollar, reflecting its status as a safe haven during times of global stress.

Treasury yields steady following overnight rise

US Treasury yields held steady during the Asian session following an overnight uptick. The yield on 10-year notes stood at 4.3537%, up five basis points from the previous day. Investors continue to weigh tariff risks and potential Federal Reserve responses.

Gold nears all-time high as safe haven demand rises

Gold gained 0.5% to reach $3,035 per ounce, just shy of its all-time high of $3,057. US gold futures rose by 0.6% to $3,039. The demand for safe-haven assets is intensifying ahead of the anticipated April 2 deadline for potential retaliatory actions from major US trading partners. As of 05:35 GMT, spot gold traded at $3,033.20 per ounce, reflecting a strong upward trend amid global concern.

Silver, platinum, and palladium decline

While gold climbed, other precious metals failed to follow suit. Silver edged down 0.1% to $33.68, platinum fell 0.3% to $971.60, and palladium dropped 0.4% to $964.01. This divergence underscores selective investor interest in safe-haven assets.

Oil prices rise cautiously amid trade tensions

Oil prices posted modest gains. Brent crude rose 0.1% to $73.87 per barrel, while US West Texas Intermediate (WTI) also added 0.1% to $69.73. Although the movement was limited, it signaled that traders are watching for geopolitical fallout from Washington's tariff moves, particularly if responses come from major energy-exporting nations.