Market Analysis

Futures Rise, Dollar Wavers as Traders Brace for Tariff Impact

Amos Simanungkalit · 24 Mar746.2K Views

Image Credit: Reuters

Financial markets started the week with a mixed performance, as U.S. stock futures rose but the dollar fluctuated, ahead of a week filled with important data, Chinese earnings reports, and the looming threat of significant U.S. tariff hikes.

S&P 500 futures gained around 0.6%, and Nasdaq 100 futures rose 0.8%. In Asia, Japan's Nikkei and Hong Kong's Hang Seng were both up about 0.2%. The euro, which had dipped slightly last week, rose about 0.2% to $1.0835 in early trading. In emerging markets, Turkey's lira remained unstable, impacted by the jailing of President Erdogan’s main political rival.

Shares of Australian fibre-cement maker James Hardie dropped 12% after announcing it would acquire U.S. outdoor building products company AZEK for $8.8 billion in cash and stock.

This week is expected to bring key data, including global purchasing managers index (PMI) readings, the U.S. Federal Reserve's preferred inflation gauge, inflation reports from Australia and Japan, and a budget update from the UK. Major earnings reports from China are also on the horizon. However, U.S. President Donald Trump’s upcoming announcement on reciprocal tariffs, set for April 2, is likely to be the main market driver. Analysts noted that after a volatile month for stocks, bonds, and currencies, there is no clear trade ahead.

"It's tough to create a solid strategy," said Chris Weston, head of research at Pepperstone. He emphasized the importance of understanding consumer behavior, as fears of a slowdown in the U.S. economy have led to weeks of dollar and stock selling, while Treasury yields have surged.

Trump's planned tariffs, which remain unclear in their details, are expected to target foreign tariffs and value-added taxes on imports. Despite Trump's recent hints of flexibility, traders remain cautious after a tumultuous first few months in office, including tariff actions against China, Mexico, and Canada.

U.S. 10-year Treasury yields have fallen nearly 40 basis points since mid-February and were steady at 4.27%. Investors have shifted away from U.S. stocks, with sharp rallies seen in Hong Kong and Europe, while Wall Street saw declines.

Hong Kong stocks are up 18% this year, the largest gain of any major market, but a 4.4% drop late last week suggested a pause as traders wait for clarity on Trump’s next moves.

Earnings reports from automaker BYD, video platform Kuaishou, Chinese banks, and property developers will be closely watched. In the U.S., companies like Dollar Tree and Lululemon are also set to report. Gold held steady just below its record high, trading at $3,021 an ounce, while bitcoin stayed at $85,860.

Bob Savage, head of markets macro strategy at BNY, noted that "cash and safe havens remain the counterbalance to any larger shift in strategy." He expects diplomatic efforts to avoid extreme tariffs but believes concerns over Trump's policy shifts will continue to drive market volatility amid ongoing economic uncertainty.