US index plunges into strong euro, Trump tariffs repeat huge changes in Germany's fiscal policy, China's countermeasures attract attention

The market has been struggling this week as worries grow. Wall Street is in tension as investors say the Trump administration’s mixed signals on the removal of tariffs are creating chaos rather than ease concerns.

S&P 500 has fallen 4.3% since President Trump took office on January 20, and tariffs are the main concern for investors. Many believe tariffs may hurt economic growth and lead to higher prices.

Stock markets faced a sharp sell-off on Thursday a month after Trump announced exemption from the 25% tariffs introduced earlier this week. The Nasdaq index fell 2.6% on the day and has been in a state of adjustment since its record high on December 16.

This latest tariff move has limited relief to stock markets, as Wall Street remains uncertain how tariff-driven trade policies will affect the economy.

Trump believes tariffs can boost revenue and growth and help negotiate with other countries. However, investors are concerned that they may damage consumer confidence and lead to businesses suppressing spending.

The U.S. employment data was temporarily suspended after Friday's release. According to the U.S. Department of Labor, the U.S. added 151,000 jobs last month after 125,000 jobs after the revised 125,000 jobs in January. Economists had predicted an increase of 160,000 jobs, avatradescn.compared with 143,000 reported earlier in January.

Forex Market:The US dollar index fell sharply overall this week, recording its worst single-week performance since November 2022. Due to US economic dataMixed and markets worried about the negative impact of tariffs, the US dollar index fell for five consecutive days to a new low in four months, closing at 103.88 this week, a drop of 3.4%. In terms of non-US currencies, the euro performed well this week, rising to a three-month high, closing at 1.0836 this week. German conservatives and Social Democrats agreed to establish a 500 billion euro infrastructure fund and will reform lending rules to increase defense spending, and the European avatradescn.commission plans to invest 800 billion euros to "rearm Europe." The move is expected to boost demand and economic growth.

Gold Market:Spot gold rose slightly this week, closing at $2911.19 per ounce, mainly due to weaker US dollar and safe-haven buying caused by concerns about tariff policies.

Crude oil market: As OPEC+ finally confirmed production increases in April and the trade war cast a shadow on the outlook for crude oil demand, international oil prices closed negative for four consecutive trading days, plummeting to their lowest point in more than three years.

Review of the news of this week

1. Trump once again concessions to Mexico and Canada

U.S. President Trump once again showed flexibility on tariffs. On March 5, the White House announced a one-month tariff exemption on cars imported through the US-Mexico-Canada Agreement. Previously, Trump had said he would impose a 25% tariff on Mexican goods and began to impose reciprocal tariffs on April 2. However, on March 7, Trump signed an amendment to exempt products avatradescn.complying with the US-Mexico-Canada Agreement from tariffs by April 2. Nevertheless, the 25% tariff measure for steel and aluminum remains the same. Canada and Mexico welcomed this, but uncertainty over the trade dispute remains.

2. China imposes tariffs on the United States

In response to the US's decision to impose 10% tariffs on Chinese products imported to the United States, China announced that it would impose tariffs on some U.S. goods from next week, mainly involving agricultural products. China will impose a 15% tariff on American chicken, wheat, corn, cotton, etc., and a 10% tariff on sorghum, soybeans, pork, etc. In addition, China has suspended the import of American logs and suspended the qualifications of soybean imports from three American avatradescn.companies. China has sued the US for tariff measures at the World Trade Organization (WTO) and has included several US avatradescn.companies on the list of unreliable entities.

3. The U.S. non-farm data was lower than expected, and the expectation of interest rate cuts was delayed.

In February, the U.S. non-farm employment increased by 151,000, and the unemployment rate rose to 4.1%, the highest since November 2024. Uncertainty in trade policy and significant federal layoffs could further undermine the resilience of the labor market. After the data was released, the market expected the Fed to postpone interest rate cuts until June, but it is still expected to cut interest rates by about 75 basis points this year. The Atlanta Fed GDPNow model's forecast for the U.S. real GDP growth in the first quarter of 2025 fell from -1.5% to -2.8%.

4. Trump establishes crypto reserves, and the crypto summit is highly affectedNote

On March 7, Trump signed an executive order to establish a strategic Bitcoin reserve, which avatradescn.comes from Bitcoin in criminal or civil confiscation procedures and will not cost taxpayer funds. The U.S. government currently owns about 200,000 bitcoins and will not sell any deposited Bitcoins. On March 8, more than 20 executives, investors and well-known figures in the cryptocurrency field will gather at the White House cryptocurrency summit to plan the future development direction of the cryptocurrency field.

5. Major changes in Germany's fiscal policy

The coalition party and the Social Democratic Party, which are in negotiations to form a cabinet, reached an important agreement on the federal fiscal debt issue, marking a major change in Germany's fiscal policy. This is the largest financial policy adjustment in Germany since the 2008 financial crisis. The agreement includes easing the “debt brake” restrictions, allowing defense spending to be exempted from constitutional lending limits when it exceeds 1% of GDP, and allocating 500 billion euros of special funds for infrastructure renovations. Prime Minister-elect Friedrich Mertz said the government will revive the economy and strengthen national defense at all costs.

6. The United States suspends military aid and pressures Ukraine peace talks

U.S. President Trump announced on March 3 that he suspended military aid to Ukraine, saying the move was intended to reassess whether aid "helps solve the problem." Senior U.S. and Ukrainian officials are scheduled to hold talks in Saudi Arabia next Tuesday, the first direct conversation since the "phone door" incident broke out. Trump hopes Kiev promises a quick ceasefire as a condition for reaching a U.S.-U.S. agreement and developing Ukrainian natural resources.

7. OPEC will start production increase as planned

OPEC+ unexpectedly announced that it will restart its oil production increase plan from April, with daily production expected to increase by 138,000 barrels next month, and gradually cancel the 2.2 million barrels per day production cut by 2026. The decision was made under pressure from Trump to lower oil prices, causing international oil prices to plunge in the short term, falling to its lowest level since December last year.

8. The ECB cut interest rates by 25 basis points

On the 6th, the ECB announced that it would lower the three key interest rates in the euro zone by 25 basis points respectively, which is the sixth rate cut since June last year. The ECB said its policy goal is to ensure inflation is stable near the 2% medium-term target, the current inflation decline process is progressing as planned, and monetary policy is gradually turning to easing. Governor Lagarde stressed that the policy interest rate will be determined based on data, and the inflation decline will be progressing smoothly, and it is expected to achieve the 2% inflation target by early 2026.

The above content is all about "[Ava Avatrade Forex Platform]: The US index plummeted and the euro was strong, Trump's tariffs repeatedly changed dramatically in Germany's fiscal changes, and China's countermeasures attracted attention" was carefully avatradescn.compiled and edited by the Avatrade Forex editor. I hope to trade for youHelpful! Thanks for the support!

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