Global Markets Report for February 3rd by Morningstar Australia
Global markets are experiencing a decline as Australian shares are expected to open lower following a drop in US stocks due to trade concerns. ASX futures indicated a 1.18% decrease or 101 points at 8:30 am on Monday, signaling a weaker start. This decline in US stocks comes as investors brace for the imposition of tariffs on goods from Canada, Mexico, and China over the weekend. The anticipation of possible exemptions for key products like energy and potential retaliation from other countries has led traders to adopt a cautious approach.
Despite the initial positive momentum driven by strong earnings reports, worries about a trade war have overshadowed market sentiment. Indexes had risen during the month, driven by optimism about business-friendly policies from the Trump administration. However, the DJIA fell by 337 points or 0.8% to 445,44, the S&P 500 lost 0.5% to 6,040, and the Nasdaq declined by 0.3% to 19,627. Nonetheless, the DJIA has seen a 4.7% increase in 2025, while the S&P 500 and Nasdaq have gained 2.7% and 1.6%, respectively.
In commodity markets, Brent crude oil was down by 0.29% to US$0.22 per barrel, while gold saw a 0.14% increase to US$2,798.41. The Australian dollar was valued at 62.08 US cents. Asian markets mirrored the downturn, with Chinese shares closing lower as the Shanghai Composite Index dropped by 0.1% to 3,250.60, and the Shenzhen Composite Index fell by 1.3% to 1,911.09. In contrast, Hong Kong shares ended higher, with the Hang Seng Index rising by 0.1% to 20,225.11. Japanese shares also closed higher, as the Nikkei Stock Average added 0.1% to 39,572.49, while Indian shares remained unchanged with the BSE SENSEX at 77,505.96.
European markets displayed mixed results, with stocks in the UK finishing higher as the FTSE 100 Index gained 0.3% to 8,673.96. Germany’s DAX remained unchanged at 21,732.05, and France’s CAC 40 saw a 0.1% increase to 7,950.17. In North America, US stocks ended lower, with the DJIA falling by 0.8% to 44,544.66, the S&P 500 dropping by 0.5% to 6,040.53, and the Nasdaq slipping by 0.3% to 19,627.44.
Among the top gainers in the S&P 500 were Franklin Resources Inc BEN, which surged by 10.42%, Eastman Chemical Co EMN with a 7.55% jump, and Vertex Pharmaceuticals Inc VRTX, which lifted by 5.33%. Conversely, the biggest decliners included Deckers Outdoor Corp DECK, which dropped by 20.51%, Walgreens Boots Alliance Inc WBA falling by 10.30%, and ResMed Inc RMD losing 8.33%. The volatile market conditions highlight the ongoing uncertainties surrounding global trade dynamics and their impact on financial markets worldwide.