Global markets mixed as Trump's tariff policies raise inflation concerns

ISTANBUL

Global markets remain uncertain as investors assess the impact of US tariff policies.

Tariffs imposed by US President Donald Trump continue to affect global economies, which are navigating the risks of inflation and recession.

While these measures are expected to complicate efforts to control inflation in the US, trade partners may also face production challenges due to the additional tariffs.

Meanwhile, with macroeconomic data sending mixed signals, monetary markets anticipate that the US Federal Reserve may cut interest rates twice this year.

Following the release of macroeconomic data on Friday, the 10-year US Treasury bond yield stabilized at 4.48% after briefly touching 4.45%.

The dollar index started the week at 106.7, down 0.1%.

Gold closed at $2,885.43 per ounce on Friday and began the new week at $2,905, up 0.7%.

Brent crude is trading at $74.6 per barrel, marking a 0.3% increase.

On the New York Stock Exchange on Friday, the Dow Jones index fell 0.37%, while the Nasdaq gained 0.41% and the S&P 500 remained flat.

US index futures started the new week on a positive note.

US stock markets will be closed on Monday for Presidents' Day.

European stock markets ended Friday on a mixed note as investors monitored developments related to efforts to end the war in Ukraine.

Kremlin spokesperson Dmitry Peskov described a phone call between Russian President Vladimir Putin and Trump as a strong signal for dialogue, stating that the focus will now shift from war to peace.

Peskov emphasized that there was no dialogue with the previous US administration and said Moscow values Trump's approach to problem-solving through negotiations.

Meanwhile, US Secretary of State Marco Rubio, National Security Advisor Mike Waltz, and Special Envoy for the Middle East Steve Witkoff are preparing to travel to Saudi Arabia for talks on the war in Ukraine.

Trump announced on Friday that US, Russian, and Ukrainian officials will meet in Saudi Arabia next week to discuss steps toward ending the conflict.

Developments surrounding potential US tariffs on the EU are also under close watch.

Speaking at the Munich Security Conference in Germany on Friday, European Commission President Ursula von der Leyen warned of potential retaliation if the US imposes tariffs on the EU, stating: “This is why we believe trade wars and punitive tariffs make no sense.”

Von der Leyen stressed that tariffs act as taxes that could drive inflation higher, warning that they may also disrupt transatlantic supply chains.

Economic data released Friday showed that seasonally adjusted GDP in the Eurozone grew by 0.1% quarter-on-quarter and 0.9% year-on-year in the final quarter of 2024.

Germany's DAX 40 fell 0.44% on Friday, while the UK’s FTSE 100 dropped 0.37%.

Meanwhile, France’s CAC 40 and Italy’s FTSE MIB 30 both gained 0.18%.

European index futures opened the new day with mixed performances, while Asian markets showed a positive trend, with gains led by the technology sector.

In China, data released on Saturday showed that the country’s current account surplus for the January-December 2024 period stood at $422 billion, representing 2.2% of GDP, according to the State Administration of Foreign Exchange Clearing.

Japan’s GDP grew by 0.7% quarter-on-quarter and 2.8% year-on-year in the fourth quarter, surpassing expectations, according to data released Monday.

With these developments, Japan’s Nikkei 225 rose 0.1%, South Korea’s Kospi gained 0.6%, China’s Shanghai Composite Index increased 0.1%, and Hong Kong’s Hang Seng Index added 0.2%.

In Türkiye, Borsa Istanbul followed a selling trend on Friday, with the BIST 100 index falling 0.37% to close at 9,877.59 points.

The USD/TRY exchange rate, which rose 0.4% to 36.2240 on Friday, is trading at 36.2070.