Market Summary Today: Trump's tariffs hit the markets... The dollar, gold, and bitcoin rise amid losses in stocks, bonds, and oil.

U.S. President Donald Trump's decision to impose a 25% tariff on imports from Canada and Mexico, and a 10% tariff on imports from China sparked a major sell-off in the stock market as investors awaited a similar decision regarding U.S. imports from the European Union, along with the potential consequences of these decisions for a global trade war, especially with many countries promising to respond with retaliatory measures.

Stock Markets

European and Asian stock markets experienced sharp losses following Trump's decision, leading to declines in U.S. stock indices during pre-market trading, as significant outflows were affected by risk aversion and heightened uncertainty in the markets, especially amid weak economic data released in some G7 countries, primarily European nations.

The losses affected shares of major technology companies and the automotive sector, as broad initial sell-offs showed that financial markets were pricing the tariffs Trump promised at levels lower than the rates announced by the U.S. administration in recent days.

Asian stock indices closed with losses, and European stock indices also decreased as investors prepared for Trump's decision regarding tariffs that he promised to impose on the UK and the European bloc as well, with some European countries pledging to respond with similar retaliatory measures.

U.S. stock indices fell, with the Dow Jones Industrial Average dropping by 0.45% to 44,356.39 points, the S&P 500 declining by 0.87% to 5,986.88 points, and the Nasdaq falling by 19,409.60 points.

In Europe, the Euro Stoxx 600 index dropped by 1.5% to 531.66 points, with a 2.1% loss for the German DAX index while the DAX fell by about 1.5%. The British FTSE 100 declined by 1.85% after Trump's commitment to impose tariffs on the UK and the Eurozone in the next stage.

In Asia, Japan's Nikkei index closed down sharply by 2.66%, the Chinese CSI 300 index fell by 0.41%, and the Australian ASX 200 lost 1.79% at the end of the session.

The Dollar

The U.S. dollar was the biggest loser from Trump's tariff decisions, with sharp losses seen in other currencies against the U.S. dollar, as the dollar index – which measures the performance of the U.S. dollar against a basket of 6 other major currencies – rose by 0.65% to 109.214 points, after it approached the 110-point mark earlier in the session, peaking at 109.881 points.

Both the euro and the British pound fell against the dollar, while the Canadian dollar dropped to its lowest level since 2003. The Australian and New Zealand dollars also declined against the U.S. currency, while investors flocked to the Japanese yen as a safe haven amid decreasing risk appetite and increasing uncertainty in the market.

On the other hand, positive data released in the U.S. today bolstered the U.S. dollar's gains, as final data showed a higher reading than initial estimates for the January manufacturing PMI, released by S&P Global, registering 51.2 points instead of 50.1 points. Additionally, the reading of the manufacturing PMI from the Institute for Supply Management in the U.S. came in higher than expected, scoring 50.9 points.

Bonds

Yields on long-term U.S. treasury bonds declined amid promises from some countries to respond to the U.S. with retaliatory measures, with yields on standard 10-year treasury bonds falling about 1.45% to 4.5%, while yields on 2-year treasury bonds – which are a gauge for pricing markets on U.S. interest rate expectations – rose by 0.14% to 4.243%.

Gold

Gold rebounded despite the strong gains of the U.S. dollar, as investor demand for the yellow metal increased as a safe haven to hedge against the potential effects of the trade war that global markets are currently anticipating after some countries pledged to impose retaliatory tariffs on their imports from the United States, in response to Trump's decision.

Spot gold prices rose by 0.75% to $2,819.660 per ounce, after hitting a new historical peak earlier in the session at $2,830.57 per ounce, while April gold futures rose by 0.51% to close at $2,849.60 per ounce.

Oil

Oil prices rose early after a report from the Wall Street Journal indicated that Saudi Arabia would refuse U.S. President Donald Trump’s request to increase oil production ahead of the timeline set by the OPEC+ alliance during its last meeting.

However, prices retreated after Russian Deputy Prime Minister Alexander Novak announced that his country planned to increase its oil production in April.

Brent crude oil prices fell by 1.27% to $75.84 per barrel, while West Texas Intermediate crude oil prices declined by 1.92% to $72.33 per barrel.

Crypto

Bitcoin was the biggest beneficiary of the recent volatility in global markets due to Trump's tariffs, as investors turned to it as a safe haven. However, the broader crypto market witnessed sharp losses, with a historical drop for Ethereum – the second-largest cryptocurrency in the market – following reports of significant sell-offs in the market.

The CEO of the cryptocurrency exchange Bybit stated today that liquidations in the crypto market may have reached $10 billion, with many leading altcoins, including Ethereum, experiencing double-digit declines, as the market continued to be affected by the first round of tariffs imposed by President Donald Trump and the reconsideration of the Indian government's stance on cryptocurrencies amid a global regulatory shift.

Bitcoin rose by 1.5% to $99,363.06, while Ethereum fell approximately 9.1% after trimming deeper losses earlier in the session, now standing at $21,706.66.