A Turbulent Start to February: Markets React to Tariffs, Earnings, and Volatility
The financial world kicked off February in a state of heightened uncertainty. Markets were already on edge, watching economic indicators and earnings reports, but then a new shock arrived—the announcement of major U.S. tariffs on imports from Canada, Mexico, and China. This single decision sent ripples through equities, commodities, and even cryptocurrencies, forcing investors to reassess their strategies overnight.
But as always, the markets don’t move in a straight line. Some sectors found footing, while others plunged. Let’s break down what happened, why, and what it all means for the road ahead.
Tariffs Shake the Markets
On February 3rd, the White House made a decisive move: a 25% tariff on Canadian and Mexican imports and a 10% tariff on Chinese goods. Almost immediately, panic set in. Investors feared a full-blown trade war, leading to a broad selloff in stocks and commodities.
The Dow Jones dropped 0.75%, as investors scrambled to hedge against potential economic slowdowns.
Asian markets followed suit, reflecting concerns about how these trade policies could choke supply chains and dampen global growth.
Economists warned that Mexico could tip into recession, while the U.S. might see an uptick in inflation.
Despite the negativity, there were still glimmers of optimism in the form of corporate earnings.
Earnings Reports: A Mixed Bag
While external forces like tariffs cast a shadow over the markets, earnings season continued in full swing, delivering moments of both relief and disappointment.
Winners of the Week:
- Palantir Technologies (PLTR): This data-driven company shattered expectations, reporting strong earnings and a bright future outlook. The result? A 22% after-hours surge in its stock price.
- Meta (META): The social media giant posted an EPS of $8.02, well above analyst expectations of $6.77.
- Microsoft (MSFT): A strong showing with an EPS of $3.23, slightly exceeding the estimated $3.11.
Companies That Struggled:
PayPal (PYPL): Despite meeting forecasts, its cautious 2025 outlook triggered a selloff.
Merck (MRK): Stock fell over 10%, disappointing investors with lower-than-expected revenue projections.
The S&P 500 managed a slight gain (+0.6%), thanks to resilient tech stocks, while the Nasdaq advanced 1.2%—a sign that investors were still willing to bet on innovation despite macroeconomic concerns.
The Rollercoaster Ride in Commodities and Crypto
While stocks reacted to earnings and tariffs, commodities and crypto saw even wilder swings.
Oil Prices: A Tense Morning Turns into a Rebound
The oil market had its own story to tell. WTI crude initially fell to $70.67 per barrel, as China responded to U.S. tariffs with its own retaliatory measures—including a 10% tariff on U.S. crude oil. The fear? That China, the world’s largest oil importer, would cut back on purchases, weakening demand.
However, as the New York morning session progressed, oil prices bounced back. The reversal came as traders realized:
Canada and Mexico’s tariffs were temporarily paused, reducing some immediate supply fears.
OPEC+ was expected to intervene to stabilize prices.
Technical traders saw WTI dipping below key moving averages, making it an attractive buy at lower levels.
By midday, oil had erased most of its morning losses, highlighting just how quickly sentiment can shift.
Gold and Silver: The Safe Havens Shine
With uncertainty gripping the markets, investors poured into gold, pushing it to a record $2,843 per ounce. Silver also climbed, closing at $32.23 per troy ounce. These moves reflected classic “risk-off” behavior—when markets are shaky, people turn to precious metals.
Cryptocurrency: A Wild 24 Hours
The crypto market saw its usual dose of volatility.
Bitcoin (BTC) initially fell 4% to $92,000, reacting to the global market turbulence.
But later, BTC rebounded to $100,000, buoyed by the delay in Canadian and Mexican tariffs.
Ethereum (ETH) wasn’t so lucky, dropping to $2,100, reflecting investor caution.
While crypto remains a risk-on asset, its resilience after the tariff shock suggests a growing maturity in the market.
The Bigger Picture: What’s Next?
This two-day period underscored one thing: volatility is back. The markets are reacting aggressively to policy shifts, earnings surprises, and global trade developments.
What should traders and investors be watching in the coming days?
- Further Trade Policy Announcements – Will the U.S. soften its stance, or will China retaliate further?
- OPEC+ Decisions – If oil prices stay weak, will producers intervene to cut supply?
- More Earnings Reports – Key companies like Amazon and Tesla are set to release their results soon.
Despite the challenges, one thing remains clear: markets never move in a straight line. Every panic-driven selloff creates new opportunities, and every rally brings fresh risks.
For now, traders and investors should remain agile, informed, and prepared for more twists in the road ahead.
Best investment strategies during volatility Bitcoin Drops Below $100K Bitcoin Profit-Taking and Liquidations brent oil Central Bank Rate Decisions CL_F Commodity Market Analysis January 2025 CPI data crude oil day trading DeepSeek AI Market Impact Dollar strength DXY Eurozone and U.S. Treasury Yields FED Financial Market Analysis Earnings Reports 2025 Tech Stocks Performance Forex analysis geo-politics Global Market Trends 2025 GOLD Gold and Oil Price Trends How tariffs affect the stock market macro market newsletter macro markets macro report macro trading market analysis market volatility OPEC Safe-haven assets during market downturns technical analysis Tech Stock Selloff January 27th Tech stocks to watch after earnings trading strategies treasury yields Trump tariffs U.S. Dollar Weakness UK Gilts USDJPY US inflation US Oil USOIL VIX WTI XTIUSD
