The S&P 500 broad market index futures are
up 0.23% to 6,043 points, though the benchmark failed to reverse its formation
to the upside after U.S. President Donald Trump announced new tariffs. Initially
vague on Friday, Trump detailed his plan over the weekend, promising to impose
25% tariffs on aluminium and steel as early as Monday. While investors feared
broader trade actions, especially against the European Union, these tariffs are
not country-specific, potentially softening their political impact. German
Chancellor Olaf Scholz warned that the EU could retaliate swiftly if targeted.
Trump may still grant exemptions to certain allies.
Despite Friday’s losses, the market is
recovering slightly as investors shift focus to upcoming macroeconomic data,
particularly U.S. inflation figures on Wednesday. Analysts expect consumer
prices to remain flat at 2.9% YoY, while core inflation is projected to edge
lower to 3.1% YoY from 3.2%. Federal Reserve Chair Jerome Powell will testify
before the data release, likely addressing Trump’s tariff policies. His
comments could set the market’s tone for the week.
Corporate earnings from McDonald’s (MCD) and
Coca-Cola (KO) are due this week, but Powell’s testimony and inflation data are
expected to have a much greater market impact. Additional key data releases
include the Producer Price Index (PPI) on Thursday and January retail sales on
Friday, with analysts predicting a seasonal slowdown. A mild cooling could
reinforce expectations that the Fed will keep rates unchanged in March. The
S&P 500 must hold above the 5,920–5,940 support zone to avoid an
accelerated decline.
The SPDR S&P 500 ETF Trust (SPY) recorded
modest net inflows of $182.5 million last week, excluding Friday. While the
strong U.S. labour market report for January may have improved sentiment,
Trump’s tariff actions could weigh on investor positioning.
Technically, the S&P 500 remains in a
downside formation, with key support at 5,930 points and downside targets at
5,650–5,750. A break below 5,930 could accelerate losses, while a sustained
move above 6,100–6,120 would open the door to 6,150–6,250.
Oil prices continue their downtrend, currently
at $75.70 per barrel of Brent crude, with targets at $68.00–70.00. Prices
recently retested resistance at $78.00–80.00, and the latest OPEC+ meeting
provided no bullish catalyst.
Gold hit a new all-time high of $2,899 per
troy ounce, breaking through the $2,850–2,880 resistance. A retest of this zone
followed by an advance to $2,960–2,980 per ounce is likely.
In currency markets, the U.S. Dollar is
strengthening slightly, pushing EURUSD down to 1.03330. A rebound above
1.05700 could send the pair toward 1.09500–1.10500.