Market Mindset

On the cusp of this past weekend, the US Supreme court announced the Liberation day tariffs from earlier on in the year – which were deemed reciprocal repercussions – lacked the judicial oversight in which to enact. Trump has in rebuttal, to what he purports to be a punitive degradation, over the course of the weekend, succumb to a 15% levy on imports in response. Trump has this ability to invoke this overnight change, which would come into force this Tuesday 24^th, under section 122 of the 1974 Trade Act. The caveat of his comeback is that this blanket 15% import taxes on all countries, is that it would only be temporary for 150 days. After this time period, congress must grant approval. 

This new temporary tariff is overall depicted as a negative turn of events, and it may be for markets, but for countries, i.e. who it directly affects in terms of trade, this is a substantial benefit and better case scenario than past infringements. The developing nations see the biggest win, and traditional US allies mostly developed countries, see a bigger hinderance than before, such as the EU and the UK. 

The real winner is Brazil, who the FT report will see the biggest reduction in the tariffs rate they have experienced by 13.6%, and the second biggest by China at 7.1%, trailed thereafter by India, Canada, and Mexico respectively. Who prior, with the original tariffs, were some of the biggest losers.

Since this announcement over the weekend, markets have reacted on opening immediately, the change can be seen covering Gold, the dollar, Bitcoin, and equities. 

• Gold: 

Gold over the past year has proven its historical sentiment ‘as good as gold’ still rings true. Its safe haven status has been evermore confirmed during another precarious political rumination, that it ais a stable asset to fall back on. Gold has risen following fresh tariff contentions on Monday, surging over 2% to reach above $5,118.70 for their spot open price, with the previous close at $5,108.255, according to Tradingview.com.  April futures open at $5,128.80 per troy ounce and are recording $5,228.90 towards the end of the trading day. 

• Dollar: 

The Greenback has held firm this Monday against sterling, with cable hovering at 1.27 throughout the day. Towards the latter half of the day there was a slight dip, but has remained stable towards the end reports Bloomberg, shown below. The same trading pattern follows throughout the day for Euro too. 

The dollar remaining still may be due to tariffs signalling higher import prices, and there sticker inflation to come, potentially pricing out future rate cuts. Higher interest rates will usually mean higher intrinsic value of countries currency, therefore increasing demand for said currency, accordingly sustaining the dollars price. 

• Bitcoin: 

Bitcoin stood out as a key crypto asset which felt an impact, observing a downward pressure falling over 4.5% to below $65,000, following the immediate happenings mentioned. This comes theoretically as no shock, as Bitcoin is a risky flight asset, drawdowns reflect increased investor concern for the need for stability in the short-term. 

This doubt should be expected to continue in the mid-term during the next 150 days for the length of these new tariffs. In addition, other news of US’s developing relationship with Iran teetering into more delicate territory, with nuclear talks set to resume. This leaves questions still in the air around the safety of risky assets like Bitcoin. US is set to meet Iran this Thursday; this will have to be watched and how it will circulate into markets. 

• Equities

A myriad of US indices have slipped into the red, ranging from the S&P 500 (0-.93%), Dow Jones Industrial Average (1.41%), and the Nasdaq-100 (1.15%), as shown below.  The Globe and Mail news outlet denoted how this overnight shift shows ‘how much uncertainty still hangs over the global economy’. 

Nonetheless, the Hang Seng Index is a positive outlier, driven by optimism of the new 15% levy being an improved relative situation for China. The surges driven by Alibaba, Tencent and SMIC. The Nikkei 225 dropping as they stand to experience a worse-off situation than before with the new 15% denotation, while too the UK. 

The EU, on behalf of the Trade chief, has denounced they will not accept trumps tariffs. They expect the US to honour its commitment laid bare in August 2025.

The Telegraph proposes how this shakeup in equities, is coming in during a precarious time, one which will see the publication of Nvidia financials this week – a company that makes up 8% of the S&P 500. Equities alike to Bitcoin will need to paid attention to, in regard to the tariffs, but also in conjunction with incipient events to come over the next week especially.

Disclaimer: not financial advice