NEW YORK/LONDON, March 11 – The euro surged to a five-month high on Tuesday following Ukraine’s acceptance of a U.S.-proposed ceasefire with Russia. Meanwhile, equity markets faced turbulence as investor sentiment remained clouded by concerns over trade tariffs.
The euro extended its gains, and European stock futures briefly trimmed losses after Ukraine agreed to a 30-day ceasefire during negotiations with U.S. officials in Saudi Arabia. However, Russia has yet to respond to the proposal.
While the ceasefire news provided some support to U.S. equities, helping indexes recover from intraday lows, markets remained volatile due to uncertainty surrounding trade policies.
Tariff Confusion Fuels Market Jitters
Earlier in the day, President Donald Trump escalated economic concerns by instructing the Commerce Department to impose an additional 25% tariff on all steel and aluminum imports from Canada, raising the total duty to 50%. However, by late afternoon, signs of a potential reversal emerged after Ontario’s premier announced a suspension of a planned 25% surcharge on electricity exports to the U.S. and scheduled a trip to Washington for negotiations.
“Uncertainty and volatility continue to dominate the market,” said Mona Mahajan, head of investment strategy at Edward Jones. “Economic growth had already shown signs of slowing before the tariff situation intensified. While some seasonal softening is typical in the first quarter, policy-driven uncertainty adds another layer of complexity.”
The previous trading session saw sharp losses, with the S&P 500 (.SPX) suffering its worst single-day drop of the year. Trump’s refusal to rule out a recession in a weekend Fox News interview further rattled investors.
Adding to economic worries, data released Tuesday showed a third consecutive monthly decline in U.S. small-business confidence, erasing much of the post-election optimism from Trump’s victory.
Market Performance and Inflation Concerns
Investors now turn their attention to Wednesday’s release of the U.S. Consumer Price Index (CPI) for February. A stronger-than-expected reading could reinforce inflation concerns, following last month’s largest monthly price increase since August 2023.
Amid a volatile trading session, the S&P 500 (.SPX) fell 42.49 points (-0.76%) to 5,572.07, while the Nasdaq Composite (.IXIC) declined 32.23 points (-0.18%) to 17,436.10. The Dow Jones Industrial Average (.DJI) posted a sharper drop, shedding 478.23 points (-1.14%) to close at 41,433.48.
MSCI’s global equity index (.MIWD00000PUS) slipped 0.73% to 826.64, approximately 7% below its February 19 record high.
European stock markets saw a brief reprieve following the Ukraine ceasefire news, though the pan-European STOXX 600 (.STOXX) still ended the session 1.7% lower.
Bond Yields and Currency Movements
Following Monday’s sharp declines, U.S. Treasury yields rebounded from five-month lows. The yield on 10-year Treasury notes climbed 6.7 basis points to 4.28%, while the 2-year yield, closely tied to Federal Reserve policy expectations, rose 5.5 basis points to 3.951%.
In currency markets, the euro briefly touched a five-month high after the Ukraine ceasefire agreement, while the U.S. dollar strengthened to a one-week high before retreating against the Canadian dollar on tariff-related developments.
- The euro gained 0.71% to $1.0909.
- The U.S. dollar rose 0.38% to 147.82 yen.
- The Canadian dollar inched up 0.06% to C$1.44 per U.S. dollar.
Commodities: Oil and Gold Recover
Oil prices rebounded following Monday’s sharp losses, though concerns over a potential U.S. recession and the broader impact of tariffs on global economic growth capped gains.
- U.S. crude futures settled 0.33% higher at $66.25 per barrel.
- Brent crude rose 0.4% to $69.56 per barrel.
Gold prices also rebounded after a sell-off in the previous session.
- Spot gold gained 0.92% to $2,915.86 per ounce.
- U.S. gold futures rose 0.88% to $2,916.50 per ounce.
With geopolitical tensions and trade policy shifts driving market swings, investors are bracing for further volatility in the days ahead.
Related topics:
Stock Futures Drop Ahead of Key Economic Data Following S&P 500’s Worst Week Since September
US Dollar Struggles Near 4-Month Low as Growth Concerns Mount, Jobs Data in Focus
