Wall Street retreats after emergency tariff move

Market Commentary

US equity indices declined sharply on Monday, surrendering prior-session gains as renewed uncertainty over US trade policy prompted investors to trim exposure to risk assets. The S&P 500 and Nasdaq 100 fell over 1%, while the Dow dropped more than 700 points. Sentiment was pressured by President Donald Trump invoking Section 122 to impose 15% tariffs on all nations, framing the move an economic emergency. This drew threats from key partners to suspend agreed trade deals and scepticism over Congressional backing. This development followed the Supreme Court’s decision to invalidate targeted tariffs from April 2025.

Software and payments stocks led the declines amid concerns over AI-related disruption. Oracle and Palantir fell 4%, while American Express slumped 7%, weighing heavily on the Dow. Nvidia, however, posted a modest gain ahead of its upcoming earnings release. Reflecting the risk-off mood, the 10-year US Treasury yield dipped to 4.03%, a near three-month low, while shorter-dated yields eased less amid tempered bets on imminent Federal Reserve (Fed) rate cuts.

Precious metals provided a counterpoint, with gold climbing 2.15% to $5 210 per ounce for a multi-week high on safe-haven flows, amplified by Trump’s tariff surcharge sparking EU and Indian pushback, stalled US-Iran nuclear talks before Thursday’s Geneva summit, Middle East tensions and returning Chinese buyers. Silver mirrored the move, rising 2.88% to $87 per ounce.

European indices dipped as well, with the pan-European STOXX 600 slipping 0.50% to around 630 and the Eurozone STOXX easing 0.30%. SAP and Adyen tumbled 3.40% and 5.40% on AI-driven demand concerns mirroring US peers, while automakers BMW, Mercedes-Benz and Volkswagen fell 1.50%–3% after the EU halted US trade deal ratification amid fresh White House tariff threats.

London’s FTSE 100 drifted slightly lower after its best weekly gain of the year, dented by President Trump’s tariff pivot from 10% to 15% post-ruling. Relx shed over 2.50% and BAE Systems more than 1%, banks including Barclays, Lloyds and NatWest lost 0.50%–2.40%, but JD Sports surged over 4% on a £200 million buyback. Miners such as Endeavour, Fresnillo, Antofagasta, Anglo American, and Glencore advanced on gold’s tailwind. Germany’s DAX 40 lagged peers, closing 1.10% weaker at roughly 24 992.

Asian markets were mixed, as local investors digested the spill-over from uncertain US trade policy and diverging regional dynamics. Hong Kong’s Hang Seng Index outperformed, rising around 2.40% as Chinese technology and export-linked stocks rallied. By contrast, Japan’s Nikkei 225 fell around 1.10% and China’s Shanghai Composite shed about 1.20%, weighed down by broader risk aversion and profit-taking in mainland shares amid renewed global volatility.

South African shares ended the day strongly higher, bucking global volatility to outperform many international benchmarks. The FTSE/JSE All Share Index rose 1.65%, driven by broad advances in resource stocks. The Resources 10 Index surged 4.22%, with the FTSE/JSE Metals and Mining Index climbing even more sharply at 4.72%, fuelled by firmer global precious and industrial metal prices alongside a weaker US dollar. This commodity strength offset softer showings in financials and industrials, underscoring the bourse’s heavy weighting towards resources and renewed appeal of emerging-market assets.