S&P 500 Down 10% in 3 Weeks Amid Tariff Woes

The S&P 500 has fallen more than 10% in just three weeks as market concerns over Trump's tariff policies intensify. While February's CPI data showed cooling inflation, it is unlikely to significantly impact the Fed's preferred PCE index, leaving investors cautious. Corporate warnings from Delta and Walmart highlight rising economic uncertainty, with Europe bracing for potential retaliatory tariffs.

Equities

The FTSE 100 rose 0.5% on Wednesday, breaking a six-day losing streak, its longest since September. The index was supported by optimism over a potential Ukraine-Russia ceasefire and positive corporate earnings.

The FTSE 250 gained 0.6%, helped by Hochschild Mining, which climbed 12.6% after reinstating its dividend payout. Hill & Smith gained 8% after posting better-than-expected annual core profit, while Balfour Beatty rose 4.5% on a higher order book and a share buyback plan.

JD Sports fell 3.2% following a weak forecast from Puma, and Legal & General dropped 2.3% after missing annual operating profit estimates.

In the US, the S&P 500 gained 0.49%, and the Nasdaq rose 1.22%, while the Dow slipped 0.2% after fluctuating throughout the session. Technology stocks led gains, with Intel jumping 4.6% after reports that TSMC proposed a joint venture with US chipmakers, including Nvidia, AMD, and Broadcom.

PepsiCo fell 2.7% after Jefferies downgraded its rating from "buy" to "hold". Goldman Sachs cut its year-end target for the S&P 500 amid concerns over rising tariffs, and J.P. Morgan warned of increasing recession risks. The S&P 500 remains 8.9% below its all-time high, while the Nasdaq is still in a correction, having fallen more than 10% from its December peak.

The US Labour Department’s inflation report showed consumer prices cooled more than expected in February, raising hopes for a Federal Reserve rate cut later this year. However, market gains were limited by concerns over President Donald Trump’s latest round of tariffs.

A 25% duty on imported steel and aluminium took effect on Wednesday, prompting retaliatory measures from Canada and the EU, which plans to impose tariffs on $28 billion worth of US goods next month. Lawmakers in Washington continued negotiations to avoid a government shutdown, adding further uncertainty.

Forex & Commodities

The dollar struggled for direction, hovering near a five-month low at 103.57 against a basket of currencies. Concerns over US trade policy and economic growth weighed on sentiment, while cooling inflation data offered some temporary relief. The yen rose 0.3% to 147.75, supported by expectations that the Bank of Japan will raise interest rates this year. Over two-thirds of economists expect a 25-basis-point hike to 0.75% in the third quarter, with some forecasting as many as three increases. A major Japanese labour union group confirmed its members had secured substantial wage rises for the third consecutive year, strengthening the case for further tightening. The Swiss franc held near a three-month high at 0.8815 per dollar, benefiting from safe-haven demand. Sterling was last seen at $1.2955, staying close to multi-month highs, supported by Britain’s cautious approach to US tariffs.

Gold rose 0.1% to $2,934.08 an ounce as trade tensions increased demand for safe-haven assets. The metal remains close to its record high of $2,956.15, reached in February. Analysts expect $3,000 to be the next target, with ongoing uncertainty around US tariffs likely to keep prices elevated.

Oil prices climbed 2% on Wednesday, with Brent settling at $70.95 a barrel and US crude at $67.68. The gains followed a smaller-than-expected rise in US crude stockpiles and larger draws in gasoline and distillate inventories, suggesting stronger demand. The dollar’s weakness also supported oil prices by making crude cheaper for buyers holding other currencies.