US Stocks Dive on Tariff and AI Concerns – Dow down 1.6%
US equity markets retreated sharply overnight as renewed concerns around US tariff policy and ongoing AI-sector uncertainty weighed heavily on investor sentiment. The Dow Jones fell 1.66% to close at 48,804, while the S&P 500 declined 1.04% to 6,837. The Nasdaq also finished lower, shedding 1.13% to end the session at 22,627. In fixed income markets, investors rotated into bonds as sentiment weighed, driving yields lower across the curve. The US 2-year Treasury yield fell 4.0 basis points to 3.483%, while the benchmark 10-year yield declined 5.4 basis points to 4.029%. Currency markets were choppy within recent ranges, with the DXY ultimately edging just 0.05% lower to 97.73 by the close of NY. Oil prices were relatively contained, with Brent easing 0.25% to $71.58 and WTI slipping 0.15% to $66.38. In contrast, precious metals benefited from haven demand, with gold surging 2.35% to $5,227.42 — its highest level since late January — and silver adding nearly 5% on the day.
Gold Back in Favour Again – up 2.5%
Gold jumped in trading yesterday as haven flows piled back into the world’s favourite precious metal. It broke out of its recent ranges as the market reacted to the tariff news out of the US on Friday and various reactions from US trading partners over the weekend and in Monday’s trading sessions. It broke through resistance levels just above the $5,100 area, which had limited rallies throughout February, to jump nearly 2.5% on the day, closing near $2,230. Traders are now looking for more potential topside moves in the sessions ahead, especially if geopolitical concerns increase on the tariff front. In addition to this, many traders are noting the return of Chinese traders to the fray today after over a week off. They have been instrumental in some of the high volatility that we have seen in 2026, and in the current environment we could see volatility step back up as we progress through the day.
Another Busy Day Ahead for Traders
Looking ahead, volatility is expected to remain elevated as traders continue to monitor geopolitical developments and digest a busier macroeconomic calendar. The return of Chinese markets following the extended Lunar New Year holiday may also generate additional movement across Asian trade, particularly in commodities and precious metals given recent price action. The Asian session will see an additional focus on Chinese markets midway through the day, with the 1- and 5-year Loan Prime Rate updates due out, both expected to remain steady at 3.00% and 3.50% respectively. The European session will see UK markets in focus, with the MPC set to testify in the Monetary Policy Report Hearings, while the New York session sees the first major US data of the week released in the form of the CB Consumer Confidence (exp. 87.4) data and the Richmond Manufacturing Index (exp. -8) numbers. We will also hear from Fed members Waller, Cook, Barkin, and Collins, as well as SNB Chair Martin Schlegel later in the day.
