Stocks Rebound on Tariffs Halt, Peso Surges
Following confirmation from President Donald Trump of a one-month suspension of anticipated tariffs on Mexico, stocks surged off session lows, triggering a rapid rebound in the peso.
The S&P 500, which had earlier declined by around 2%, closed down 0.6%. Defensive sectors led the recovery, while automotive, semiconductor, and industrial stocks remained under pressure.
The dollar erased most of an earlier rally that was set to be the largest since the start of the pandemic. Meanwhile, the peso strengthened by 1.1%, and the Canadian dollar reduced its decline to 0.4%.
Uncertainty Remains for Canada
According to experts at Truist Advisory Services, Canada is skeptical of a long-lasting reprieve from tariffs. Until clarity is established on the duration and magnitude of potential tariffs, uncertainty will persist for supply chains and pricing across North America.
President Trump's emergency declaration to impose tariffs on Canada, Mexico, and China marks the most comprehensive protectionist measure by a US president in nearly a century. While Mexico and Canada have pledged retaliation, President Sheinbaum stated on social media that she had a "good conversation" with Trump.
Market Movements
* Stocks: S&P 500 fell 0.6%, Nasdaq 100 fell 0.7%, Dow Jones Industrial Average fell 0.2%, Stoxx Europe 600 fell 1%, MSCI World Index fell 1%.
* Currencies: Bloomberg Dollar Spot Index unchanged, Euro fell 0.4%, British pound rose 0.3%, Japanese yen rose 0.3%, Mexican peso rose 1.1%, Canadian dollar fell 0.4%.
* Cryptocurrencies: Bitcoin rose 1.6%, Ether fell 7.2%.
* Bonds: Yield on 10-year Treasuries declined 3 basis points, German 10-year yield declined 6 basis points, British 10-year yield declined 5 basis points.
* Commodities: West Texas Intermediate crude rose 0.2%, Spot gold rose 0.8%.