S&P 500 Rally Fizzles Amid Tariff Uncertainty

The S&P 500’s Monday gains are losing momentum as uncertainty over US tariffs continues to weigh on investor sentiment. Asian markets rose early on hopes of limited reciprocal tariffs but retreated by afternoon, while US and European futures pointed lower. Meanwhile, the Indonesian rupiah hit its lowest level since the 1990s amid concerns over fiscal risks tied to President Prabowo's spending plans.

Equities

The FTSE 100 slipped 0.1% on Monday as investors held back ahead of potential US tariff announcements. Losses in pharmaceuticals weighed on the index, while gains in mining shares helped to offset the drag. AstraZeneca fell 1.3%, pulling down the broader sector, which ended 1.5% lower. Vodafone dropped 4.4% after Bank of America Global Research downgraded the stock to ‘neutral’ from ‘buy’ and lowered its price target. The FTSE 250 ended flat.

Anglo American rose 2.7%, Glencore added 2.2%, Antofagasta climbed 1.4%, and Rio Tinto was up 1.2%, supported by stronger copper prices. Traders appeared to be positioning ahead of expected US import tariffs on industrial metals. Sentiment also got a lift from JPMorgan, which double-upgraded the European mining sector to ‘overweight’ from ‘underweight’. Meanwhile, Cranswick fell 2.4% following news that bird flu had been detected in a sheep in England, a headline likely to raise concerns about food safety and supply risks.

In the US, the S&P 500 rose 1.76% to close at 5,767.57, marking its highest close in over two weeks. The Nasdaq gained 2.27% to 18,188.59, while the Dow Jones added 1.42% to 42,583.32. The rally was driven by a rebound in technology shares, including Nvidia, which climbed more than 3%, and Tesla, which surged almost 12% in its strongest one-day rise since November. Tesla’s jump followed signs that upcoming US tariffs may be more limited than initially expected, easing concerns about the potential impact on electric vehicle supply chains.

Advanced Micro Devices rallied 7%, helping push the Philadelphia Semiconductor Index up 3%. Bitcoin-related shares also performed well, with MicroStrategy up 10% and Coinbase gaining 7% as bitcoin prices rose around 4%. Lockheed Martin fell over 1% after a downgrade from BofA Global Research, which shifted its rating to ‘neutral’ from ‘buy’. Dun & Bradstreet rose 3% after agreeing to a $7.7 billion acquisition by Clearlake Capital.

Meanwhile, US data pointed to stronger business activity, with the March flash Composite PMI rising to 53.5 from 51.6 in February, ahead of Friday’s inflation reading from the Fed’s preferred Personal Consumption Expenditures index.

Forex & Commodities

The US dollar edged higher, touching a three-week high of 150.92 against the Japanese yen before settling around 150.56 in Asia. This move followed stronger-than-expected US services PMI data and suggestions from President Trump that some countries may be spared from the reciprocal tariffs scheduled for 2 April. The dollar index rose for the fourth session in a row, closing at 104.3. Against the euro, the dollar firmed to $1.0781—its strongest since 6 March—before trading at $1.0804. Sterling slipped to a two-week low of $1.2883 before stabilising at $1.2935.

Gold prices edged higher as safe-haven demand remained firm ahead of the expected tariff announcements and ongoing inflation concerns. Spot gold rose 0.1% to $3,015.66 per ounce, while US gold futures gained by the same margin to $3,019.70. Silver rose 0.3% to $33.10, with platinum and palladium both up 0.2%. Funds focused on gold mining stocks are set to record their strongest net monthly inflows in over a year, as record prices boost profit expectations. Investors are also closely watching the US Personal Consumption Expenditures (PCE) index due Friday, the Federal Reserve’s preferred inflation measure.

Brent crude was steady at $73.01 a barrel, while West Texas Intermediate hovered at $69.10. Both benchmarks had gained over 1% on Monday after Trump introduced a 25% tariff on countries buying oil from Venezuela. The administration also extended Chevron’s deadline to wind down operations there to 27 May, potentially affecting up to 200,000 barrels per day in output. Meanwhile, OPEC+ looks set to increase output again in May, balancing steady prices against internal production adjustments.