Market Commentary: Tuesday 4th March

Markets continue to show uncertainty, with the VIX ticking higher and equities in defence mode. Headlines are once again dominated by Trump tariffs, as tariffs on China, Mexico, and Canada all went into effect at midnight in New York. Geopolitical uncertainty remains at the forefront—yesterday, Trump paused military aid to Ukraine in retaliation for last week’s clash with Zelensky, which provided a boost to European defense stocks. The only certainty at the moment seems to be more uncertainty… but only the brave will sell vol right now.

US equities have been testing fresh lows from last week’s sell-off, but with China’s more moderate response, there is some hope that a full-blown trade war can be avoided. Crypto also remains on the back foot, with Bitcoin trending lower despite Trump’s calls for a digital-asset stockpile. Bitcoin ($83,522) is now almost 22% off its all-time highs, while Ethereum ($2,078) is nearly 50% off its 2024 highs.

Later today, we have Eurozone unemployment data as we build up to Thursday’s ECB meeting, followed by Trump’s address to Congress this afternoon, where we’ll get the latest tariff update.