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10/02/2025 - 08:48 UTCThe US dollar posted a moderate decline against most major currencies last week, with the dollar index (USDX) losing 0.27% of its value after January’s nonfarm payrolls report that came out lower than expectations and as Trump maintained the prospect for additional tariffs this week, keeping markets largely on edge.
US stock indices posted small gains last week prior to the announcement of new US tariffs on steel and aluminum imports and planned reciprocal tariffs. The tariff news had a more immediate impact on Asian markets, with steelmaker shares mostly declining on Monday, while US Treasury yields climbed. The earlier imposition of a 10% tariff on Chinese imports by the US has led to retaliatory measures from China, including tariffs on US oil, liquefied natural gas, and coal, which came into play earlier Monday.
McDonald's will release its fourth-quarter earnings report before Monday's trading session. Analysts expect a 1% decline in same-store sales, the third consecutive quarter of such declines for the company. McDonald's stock has gained only 2% over the past year, bringing its market capitalization to approximately $211 billion.
Despite this uncertainty, European stocks have had a strong start to the year, overperforming Wall Street over the first six weeks of 2025. These gains have been powered by cheap valuations, earnings growth, hopes for more monetary easing by the European Central Bank, as well as Germany potentially loosening fiscal policy.
Uncertainty across multiple fronts pressured oil prices last week. WTI fell 2.88% and Brent 1.92% as investors grappled with the potential impact of new US tariffs on steel and aluminum, which could slow global economic growth and thus energy demand. Reports of progress in US-Russia negotiations regarding the Ukraine war, while positive, lacked concrete details, adding to the overall uncertainty.
On the cryptos front, the two top cryptocurrencies by market capitalization, Bitcoin and Ethereum remain under pressure, ending lower last week by approximately 4.17% and 15.53% respectively.
In the week ahead, Fed Chairman Powell Testifies about Semi-Annual Monetary Policy Report before the Senate Banking Committee. Market focus could turn to U.S. Core CPI data due on Wednesday, PPI data due on Thursday, and Retail Sales on Friday.
The EUR/USD pair closed lower on Friday, slipping 0.55% as market sentiment remained pressured by expectations of a widening interest rate gap between the United States and the Eurozone.
Fresh data from the U.S. Bureau of Labor Statistics (BLS) revealed that Nonfarm Payrolls (NFP) increased by 143,000 in January—well below December’s revised 307,000 and missing the market forecast of 170,000. However, the Unemployment Rate edged down to 4% from December’s 4.1%, suggesting resilience in the labor market despite slowing job growth.
Following the latest jobs report, the Federal Reserve is now anticipated to keep interest rates steady throughout the year. In contrast, the European Central Bank (ECB) has already moved toward monetary easing, cutting rates and signaling the potential for further reductions in March.
The diverging monetary policy outlook continues to exert downward pressure on the euro, keeping investors cautious about the pair’s trajectory in the near term.
Gold extended its uptrend on Friday as escalating trade tensions between the U.S. and China, coupled with a mixed U.S. employment report, bolstered demand for the precious metal.
Comments from U.S. President Donald Trump, indicating plans to impose reciprocal tariffs on multiple countries this week, provided further support for bullion. Rising geopolitical uncertainty heading into the weekend could enhance gold’s appeal as a safe-haven asset.
With lingering trade tensions and central bank policy in focus, gold remains well-positioned as a key asset for risk-averse investors.
Oil prices closed higher on Friday after the U.S. imposed fresh sanctions on Iran’s crude exports. However, prices posted a weekly decline as concerns over President Donald Trump’s renewed trade war with China and threats of additional tariffs weighed on market sentiment.
Market participants closely monitored statements from Trump throughout Friday, as any policy shifts could quickly impact crude markets.
With geopolitical uncertainty and demand concerns in focus, crude markets remain highly reactive to policy developments and economic signals in the weeks ahead.
The US 500 closed significantly lower on Friday as investors reacted to a weaker-than-expected jobs report and a sharp rise in inflation expectations. Adding to market jitters, President Donald Trump announced fresh tariff measures set to take effect next week.
President Trump signaled plans to impose higher tariffs this week on imported goods, aiming to align them with the rates imposed by U.S. trading partners. While details on which countries would be affected remain unclear, the announcement reignited fears of a global trade war, dampening investor sentiment.
Amazon stock slid 4% after the company projected first-quarter 2025 sales of $151 billion to $155.5 billion, falling short of analysts’ expectations of $158.33 billion.
Tesla shares fell 3.4% after data from the China Passenger Car Association showed the automaker’s sales of China-made electric vehicles dropped 11.5% year-over-year in January to 63,238 units.
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