The prospect of narrower-than-feared U.S. tariffs rekindled some investor optimism in recent days but the relief rally in stocks is already showing signs of petering out, worn down by the unrelenting uncertainty over what comes next.
Asian stocks took their cues from Wall Street and rose during the early Asia trading hours on signs that there may be negotiations under way to head off or narrow the scope of reciprocal tariffs due to be announced on April 2.
German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, March 7, 2025. REUTERS
But by afternoon Asian stocks were wavering, while U.S. and European stock futures pointed lower.
The markets' gyrations underscore investor skittishness over U.S. tariffs and the damage they could inflict on the global economy as well as on corporate profits.
U.S. President Donald Trump indicated on Monday that not all of his threatened levies would be imposed on April 2 and that some countries may get a break. He also warned that automobile tariffs are coming soon and slapped 25% secondary tariffs on any country that buys oil or gas from Venezuela.
And those were just the tariff headlines from Monday!
With the economic calendar during European hours rather sparse, global trade conflicts will remain in the spotlight even if market reactions for now will likely be muted.
Indonesia's fiscal health
Among currencies, the focus during Asian hours was on the Indonesian rupiah, which sank to its lowest level since the Asian financial crisis of the late 1990s on the dollar's overall strength and worries over the fiscal health of Southeast Asia's largest economy.
Investor confidence has been waning in Indonesia, where the stock market last week felt the brunt of investor angst over Indonesian President Prabowo Subianto's massive social spending plans.
The dollar was near a three-week high against the yen and the euro after upbeat U.S. services data eased some concerns about where the economy is headed.
Overshadowing everything in the markets, however, is what's happening with tariffs - implemented, proposed and on the way - and whether they may undermine economic growth in the United States.
Graphics are produced by Reuters.
Key developments that could influence markets on Tuesday:
Economic events: Germany business climate survey for March from the Ifo institute
Graphics are produced by Reuters.
Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.
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