12/03/2025 - 08:14 UTCThe US dollar fell against most major currencies on Tuesday, with the USDX down by 0.51% on the iFOREX platform. Growing uncertainty about the U.S. economy, driven by declining consumer sentiment, weak labor markets, and tariff-related concerns, has fueled fears of a possible recession.
Trade tensions escalated Tuesday when the President announced a 50% tariff on Canadian steel and aluminum, responding to Ontario's electricity surcharge. However, the situation quickly de-escalated as Ontario agreed to suspend the surcharge and meet with U.S. officials, leading the President to retract the increased tariff and revert to the original 25%.
U.S. stock indices displayed a mixed performance on Tuesday, recovering slightly from Monday's losses. The US 500 dipped 0.15%, and the US 30 fell 0.95%, while the US Tech 100 rose nearly 0.9%, driven by tech gains. Tesla shares rebounded 3.86% following a sharp decline of more than 15% the day before, coinciding with the President publicly showing support for the company. Further contributing to the tech sector's gains, NVIDIA and Broadcom saw their shares climb by 1.66% and 2.99%, respectively. In contrast, Delta Air Lines Inc. experienced a sharp decline of approximately 7.2%. This steep drop followed the airline's revised first-quarter earnings per share (EPS) forecast, now projected to be between $0.30 and $0.50, significantly lower than the previous estimate of $0.70 to $1.00. The airline also reduced its revenue growth expectations from 7%-9% to 3%-4%, citing weakened domestic travel demand and increasing economic uncertainties. Market participants are now closely monitoring the forthcoming Consumer Price Index (CPI) report, as it could provide critical insights into inflationary pressures
On the energy front, the two main benchmarks WTI and Brent rose by 1.43% and 1% respectively with markets closely tracking a weekly inventory report by the Energy Information Administration as well as OPEC+'s decision to increase production in April, a move that could significantly impact prices.
The market's focus is now on the upcoming CPI data, as it will provide critical insights into inflation trends and the Federal Reserve's potential response. According to reports, concerns persist that tariffs could possibly maintain inflationary pressures, delaying further interest rate reductions. Some price action could also be observed upon the release of Canada’s interest rates decision and weekly crude oil inventories from the Energy Information Administration. Later this week the focus will be on the release of the preliminary consumer sentiment and inflation expectations reports due on Friday.
The EUR/USD surged on Tuesday as bullish sentiment pushed the pair to fresh 22-week highs. With limited EU economic data this week, traders remain focused on key US releases.
The latest JOLTS report showed job openings rising to 7.74 million in January, surpassing expectations of 7.63 million and December’s revised 7.51 million. This provided some stability for markets amid ongoing volatility.
Attention now shifts to today's US Consumer Price Index (CPI) data for February. After an unexpected uptick in January inflation dashed hopes for early Fed rate cuts, markets anticipate a slight decline, with headline CPI expected at 2.9% year-over-year, down from 3.0%.
Gold surged on Tuesday, climbing over 1% as trade war concerns fuelled demand for the safe-haven asset. Despite upbeat US jobs data, traders continued to favour the precious metal, driven by fears of an economic slowdown and declining US Treasury yields.
Market sentiment improved slightly as Canada and the US de-escalated tariff threats. However, uncertainty remains, with US tariffs on aluminum and steel imports set to take effect today. Meanwhile, the US Bureau of Labor Statistics (BLS) reported a rise in job openings for February, though it had little impact on Gold’s rally.
In geopolitical news, Saudi Arabia confirmed Ukraine’s willingness to accept a ceasefire proposal, with US Secretary of State Marco Rubio stating that negotiations now hinge on US efforts to persuade Russia. A potential ceasefire could pressure Gold prices, as the metal typically gains amid geopolitical uncertainty.
Oil prices closed higher on Tuesday, supported by a weaker dollar, though gains were limited by concerns over a potential U.S. economic slowdown and the impact of tariffs on global growth. The dollar index hit a four-month low, making oil more affordable for international buyers.
Oil pared gains after President Donald Trump announced an additional 25% tariff on Canadian steel and aluminum, escalating trade tensions. Trump's protectionist stance has rattled global markets, with fluctuating tariffs on Canada, Mexico, and China fueling uncertainty.
Meanwhile, the U.S. Energy Information Administration (EIA) projected record crude production in 2024 at 13.61 million barrels per day. Investors now await U.S. inflation data on Wednesday for rate policy insights, alongside OPEC+’s upcoming production decisions.
U.S. stocks declined on Tuesday, deepening the largest selloff in months as investors grappled with the economic impact of escalating tariff tensions.
Market volatility remained high throughout the session, driven by conflicting updates on trade policies. Brief optimism emerged as progress toward a potential ceasefire between Ukraine and Russia momentarily lifted equities.
Investor sentiment took another hit after President Donald Trump announced plans to double tariffs on all imported Canadian steel and aluminum to 50%, set to take effect within hours. Concerns over Trump’s trade policies—including tariffs targeting Canada, Mexico, and China—have fueled fears of an economic slowdown or even a potential recession.
Meanwhile, a U.S. Labor Department report showed an increase in job openings for January, adding another layer of complexity to the market outlook.
The materials contained on this document should not in any way be construed, either explicitly or implicitly, directly or indirectly, as investment advice, recommendation or suggestion of an investment strategy with respect to a financial instrument, in any manner whatsoever. Any indication of past performance or simulated past performance included in this document is not a reliable indicator of future results. For the full disclaimer click here.
Join iFOREX to get an education package and start taking advantage of market opportunities.
A beginner's e-book
$5,000 practice demo account
A 12-part video course
English (India) 
Arabic - العربيه
Chinese Simplified - 中文 (简体)
Chinese Traditional - 中文 (繁體)
English
Japanese - 日本語
Kazakh - Қазақ
Korean - 한국어 (대한민국)
Russian - Русский
Spanish - Español
Thai - ไทย
By