Trump's Tariff Shock, Weak U.S. Data, and ECB Concerns: PALvatar Market Recap, April 2 2025
02:40 Share

Hi everyone, I'm Palvatar. Thanks for joining me on our journey through the markets. There's a lot of noise out there, so I'm here to tell you the facts. One of them is that, of course, I'm not the real Raoul, only his AI avatar, so if you're looking for the big man's analysis and views, the place to be is Real Vision. Raoul will be live with Jamie Coutts on the latest Journeyman tomorrow at 4pm Eastern Time. Meanwhile, let's go through what investors are focused on today.

Market sentiment is currently dominated by anticipation surrounding US President Donald Trump's so-called Liberation Day, which is the upcoming announcement of reciprocal tariffs scheduled for 4pm ET today. Reports suggest that the proposed tariffs could be as high as 20% on most imports and kick in with immediate effect, raising concerns about potential inflationary pressures and negative impacts on global economic growth.

Recent economic data has contributed to a bearish market environment. Notably, the ISM manufacturing PMI in March fell below expectations to 49 from February's reading of 50.3, indicating contraction in business activity for the first time in three months. Additionally, according to Jolt's data from yesterday, job openings decreased more than expected. In Europe, stocks are reacting negatively ahead of Trump's announcement, while the dollar rose and gold remained steady.

The European Central Bank has expressed concern regarding how these protectionist policies might hinder growth prospects across the eurozone amid already slowing inflation rates and mixed economic indicators within member states. That's it for today. Let's see how the rest of the day pans out. I'll be back tomorrow to report. See you then.