The Dow Jones Index (US30) rose by 0.28% on Tuesday. The S&P 500 Index (US500) added 0.03%. The Nasdaq Technology Index (US100) was down 0.29%. The US stocks had a mixed session on Tuesday as investors weighed Fed Chairman Jerome Powell’s cautious stance on interest rates and President Trump’s new 25% tariffs, which fueled fears of a potential trade war.

Today, markets will focus on the US inflation report for January, which is expected to be unchanged from December at 2.9% y/y, while core CPI is expected to fall to 3.1% y/y from 3.2% in December. Also on Wednesday, Fed Chairman Powell will testify on the economy and monetary policy before the House Financial Services Committee. Markets rate the odds of a 25 bps rate cut at the next FOMC meeting on March 18–19 at 6%.

Tesla (TSLA) stock price fell more than 6% and topped the list of losers in the Nasdaq 100. Technical selling weighed on Tesla after it fell below its 100-day moving average. Humana (HUM) closed down more than 3% after expecting 2025 adjusted EPS of $15.88, which was weaker than the consensus estimate of $16.09.

The Canadian dollar stabilized near 1.43 per US dollar, continuing its recovery from the 22-year low of 1.455 recorded on January 31. This was helped by a strong labor market, which reduced the need for the Bank of Canada to cut rates. Unemployment fell to 6.6% in January, easing fears of labor market weakness noted by the Bank of Canada. The currency’s recovery was also aided by a temporary pause in the imposition of 25% tariffs on Canadian exports, which was secured by Prime Minister Trudeau for further negotiations. In addition, rising crude oil prices amid supply concerns boosted demand for the commodity-linked loonie.

Equity markets in Europe were mostly up on Tuesday. Germany’s DAX (DE40) rose by 0.58%, France’s CAC 40 (FR40) closed 0.28% higher, Spain’s IBEX 35 (ES35) added 0.52%, and the UK’s FTSE 100 (UK100) closed up 0.11%. European equities closed solidly higher, continuing their strong momentum on Tuesday as strong corporate results reinforced the view that European equities have a favorable valuation compared to North American peers, while markets assessed the impact of new US tariffs on European corporate giants. In the heavy discretionary sector, Ferrari shares jumped 2.8% and continued their momentum after the earnings release, while Kering shares rose by 1.3%. On the other hand, UniCredit shares fell by 1% after the release of results.

WTI crude oil prices fell to around $73 a barrel on Wednesday, interrupting three days of gains after an industry report showed a sharp rise in US crude inventories. API data showed US crude inventories rose by 9 million barrels last week, well above the expected 2.8 million increase, which would be the biggest increase in a year if official data is confirmed today. Traders also remained cautious amid escalating trade tensions and broader economic uncertainty.

Asian markets were mostly down yesterday. Japan’s Nikkei 225 (JP225) was not trading yesterday, China’s FTSE China A50 (CHA50) was down 0.29%, Hong Kong’s Hang Seng (HK50) decreased by 1.06%, while Australia’s ASX 200 (AU200) was positive 0.01%. Hong Kong stocks soared 1.8% to 21685 in early trading on Wednesday. The Hang Seng hit its highest level in four months after China’s cabinet pledged to boost spending and attract foreign investment ahead of the annual legislative meeting in March.

The Australian dollar strengthened above US$0.63 on Wednesday, hitting its highest level in eight weeks, as traders largely reacted to the latest tariffs imposed by US President Donald Trump. Markets also adjusted their expectations on the impact of tariff escalation on inflation as they awaited the release of the latest US Consumer Price Index report. Domestically, investors continued to monitor the Reserve Bank of Australia’s monetary policy outlook. It is increasingly likely that the RBA will start cutting interest rates as early as this month as inflation weakens and signs of slowing economic growth emerge.

The Indian rupee posted its biggest one-day gain in nearly two years on Tuesday, rebounding from a series of record lows, bringing its monthly realized volatility to 4.4%, the highest level since April 2023. Despite the recovery, pressures remain due to a widening trade deficit, high crude oil prices and global risk aversion.