At Monday’s close, the Dow Jones Index (US30) decreased by 1.48%. The S&P 500 Index (US500) was down 1.76%. The Nasdaq Technology Index (US100) lost 2.20%. The US stocks continued to decline on Monday amid the release of pessimistic economic data, concerns over the imposition of tariffs, and geopolitical disagreements between Washington and Ukraine. The latest ISM report showed that US manufacturing growth in February was stronger than expected, driven by weaker demand, slower production, and higher prices due to tariffs, among other factors. Investors are now focused on Friday’s monthly jobs report for more labor market updates.

The Mexican peso fell to around 20.7 per US dollar, hitting its lowest level in a month, as trade war fears weighed on sentiment after US President Donald Trump confirmed that 25% tariffs on goods from the country will take effect early Tuesday. In terms of economic news, Mexico’s manufacturing sector contracted for the eighth consecutive month, indicating continued weakness in industrial activity. Business confidence also fell in February, underscoring the gloomy economic outlook. Along with weak labor, inflation, and GDP numbers, the latest data has reinforced expectations that Banxico will further reduce borrowing costs.

The Canadian dollar slipped to 1.45 per US dollar, marking its eighth straight session of losses and hitting a one-month low, as rising trade war fears continued to dampen market sentiment. US President Donald Trump confirmed that 25% tariffs on Canadian goods will take effect as planned, saying there is “no room left” to avoid tariffs.

Equity markets in Europe were mostly up on Monday. Germany’s DAX (DE40) rose by 2.64%, France’s CAC 40 (FR40) closed 1.09% higher, Spain’s IBEX 35 (ES35) Index gained 0.19%, and the UK’s FTSE 100 (UK100) closed positive 0.70%. European leaders met over the weekend and showed consensus on increasing military spending to leverage a potential peace deal in Ukraine and respond to signs of reluctance to coordinate defense with the United States.

WTI crude oil prices fell to around $68 a barrel on Tuesday, near a three-month low, as US President Donald Trump’s tariffs against key trading partners took effect and OPEC+ signaled plans to resume suspended production. Beijing immediately retaliated by imposing additional tariffs of up to 15% on imports of key agricultural products from the US, which will take effect on March 10. That has heightened fears of a global trade war that could hurt economic growth and reduce energy demand. On Monday, OPEC+ said it would start rolling back production cuts of 2.2 million barrels a day from April 1, restoring supplies that have been capped since 2022, adding to downward pressure.

Asian markets were mostly down yesterday. Japan’s Nikkei 225 (JP225) was down 0.91%, China’s FTSE China A50 (CHA50) fell by 1.11%, Hong Kong’s Hang Seng (HK50) lost 0.83% and Australia’s ASX 200 (AU200) was negative 0.34%.

On Tuesday, China imposed tariffs on US goods and other trade measures in response to US President Donald Trump’s decision to raise tariffs on all Chinese imports to 20% from 10%. China’s Ministry of Finance announced 15% tariffs on US chicken, wheat, corn, and cotton, and 10% tariffs on soybeans, sorghum, pork, beef, fruits, vegetables, seafood, and dairy products. These measures will take effect on March 10. The new tariffs coincide with the start of a key annual policy meeting in China this week. The country is expected to adopt new stimulus measures to help its economy withstand the impact of the increased tariffs.

The Australian dollar slipped as low as $0.62 on Tuesday, nearing a one-month low, after minutes from the Reserve Bank of Australia’s February meeting showed policymakers focused on downside risks to the economy, indicating a more dovish stance. The Central Bank also noted weaker-than-expected fourth-quarter inflation data and slowing wage growth. The currency’s fall was exacerbated after US President Donald Trump confirmed that tariffs on Mexico, Canada, and China would take effect as planned. Given Australia’s heavy reliance on exports, any disruption to global trade is expected to have a significant impact on the economy.