27/02/2025
Global Markets React to Trade Uncertainty, Earnings Reports, and Economic Data
Equities and Earnings
European stocks declined following U.S. President Donald Trump’s renewed threats to impose 25% tariffs on EU imports. The Stoxx 600 fell 0.4%, with the auto sector leading losses. Germany’s DAX dropped 0.2%, while France’s CAC 40 slipped 0.3%. In contrast, U.S. stock futures advanced, with S&P 500 and Nasdaq 100 futures gaining 0.4% and 0.5%, respectively, as investors reacted to Nvidia’s earnings and Trump’s tariff stance.
Nvidia posted strong Q4 earnings, with revenue surging 78% year-over-year to $39.3 billion, and net income rising 80% to $22 billion. The company projected Q1 revenue of $43 billion, surpassing expectations. However, concerns over narrowing profit margins due to rising costs led to muted stock movement. Dell’s earnings are expected to reflect strong demand for AI-optimized servers but weaker PC sales.
In Europe, Rolls-Royce surged over 15% after reporting a 16% revenue increase to £17.8 billion, driven by Civil Aerospace growth. The company upgraded its 2025 financial forecasts, anticipating operating profit and free cash flow 8% above consensus. Conversely, Italy’s Eni SpA missed Q4 earnings expectations, with adjusted EBIT at €1.69 billion and net income at €892 million, weighed down by weaker-than-expected contributions from its Plenitude and Enilive units.
Trade and Policy Developments
Trump’s tariff threats remained a key market driver. The U.S. administration signaled potential delays in implementing 25% tariffs on Canada and Mexico, with a White House official indicating that the March 4 deadline is still under review. Meanwhile, Trump confirmed that duties on EU goods would be part of his broader trade policy. The EU vowed to retaliate against any unjustified trade barriers.
Commodities and Currencies
Oil prices rebounded after Trump reversed a license allowing Chevron to operate in Venezuela, raising concerns over supply constraints. Brent crude rose 0.4% to $72.69 per barrel, while WTI climbed to $69.21 per barrel. Gold prices declined as the U.S. dollar strengthened and Treasury yields edged higher.
Cryptocurrency and Bonds
Bitcoin fluctuated, recovering to $86,400 after dipping below $84,000. In fixed-income markets, Treasury yields ticked higher as traders reassessed economic data and trade risks.
Economic Outlook
Investors remain focused on upcoming economic indicators, including eurozone sentiment data and U.S. inflation figures, which could influence central bank policy decisions in the coming weeks.
IMPORTANT DISCLAIMER
The information in this report is of a general nature only. It is not a piece of personal financial advice. It does not take into account your objectives, financial situation, and personal needs.
a-Quant is not responsible for your actions and recommends you contact a licensed financial advisor before acting on any information contained in this general information report.
