Trump to launch trade investigation, another tariff war on the way?

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Weekly Financial Express: Escalation in EU-US trade tensions, renewed suspense over the Fed Chair, and heightened volatility in global markets!

Last week, the Trump administration announced new tariffs on eight European countries, escalating global trade tensions; meanwhile, renewed uncertainty over the Federal Reserve Chair added doubts to market expectations of a rate cut in 2026. The three major U.S. stock indexes fell together, risk aversion in global markets intensified, with the VIX fear index rising over 9% in a week. What are the other key developments in the global market? Get a quick overview here!

Content compiled by the 'Harbor Family Office' under Henry Group. It does not constitute any investment or trading advice. Stay tuned.

Focus Points >>>

– Trump announced additional tariffs on some European countries over the Greenland issue.

U.S. President Trump announced last Saturday that he will impose a 10% import tariff on goods from Denmark, Norway, Sweden, France, Germany, the Netherlands, Finland, and the UK, effective February 1, with plans to increase the rate to 25% starting June 1, depending on further negotiation progress. This action has escalated disputes related to Greenland. Eight European nations have warned the U.S., stating that Washington's military takeover of NATO territory could lead to the collapse of the military alliance led by the U.S. government. Germany, France, and others condemned the move as blackmail on Sunday, with France pushing for a series of economic countermeasures in response.

– Canada and China have reached a preliminary trade agreement, significantly reducing tariffs on electric vehicles and canola seeds

Canadian Prime Minister Chrystia Freeland said last Friday that Canada and China have reached a preliminary trade agreement. The agreement includes tariff cuts for electric vehicles and canola seeds, with both countries committing to removing trade barriers while establishing a new strategic relationship. The Ministry of Commerce's Department of American and Oceanian Affairs stated that Canada will grant China an annual quota of 49,000 electric vehicles eligible for the most-favored-nation tariff rate of 6.1%, eliminating the 100% surcharge, while the quota will increase annually at a certain rate.

– Trump says he wants Hassett to remain as White House advisor

Last Friday, U.S. President Trump praised his economic advisor Kevin Hassett and expressed hope that Hassett would continue in his advisory role. Hassett had previously been considered a leading candidate for the next Federal Reserve Chair, and Trump’s remarks further increased uncertainty regarding the selection of the next Fed Chair. Some analysts are now speculating that Kevin Warsh will replace Hassett as the frontrunner for the position.

– U.S. Department of Justice launches criminal investigation into Federal Reserve Chair Jerome Powell

Earlier last week, the U.S. Department of Justice launched a criminal investigation into Federal Reserve Chair Jerome Powell, triggering significant backlash. Powell responded by saying the move was an excuse to influence interest rates, while several former Fed Chairs and key Republican members condemned the action. Central bank governors from multiple countries and CEOs of major Wall Street banks have also voiced their support, stating that Powell has acted with integrity, and central bank independence is crucial for maintaining price stability and financial market equilibrium.

Stock Market >>>

– U.S. markets: New developments emerge regarding Federal Reserve Chair candidates; major U.S. indices close lower

Last Friday, there was a shift in the status of Federal Reserve Chair candidates after Trump expressed his desire for Kevin Hassett to remain as White House advisor. This development brought Kevin Warsh into the spotlight as the most watched candidate, somewhat dampening market expectations for a Federal Reserve interest rate cut in 2026. The U.S. stock market reversed earlier gains to close lower, with all three major U.S. indices finishing in the red, while the VIX fear index edged slightly higher.

As of last Friday’s close, the Dow Jones Industrial Average fell 0.17% to 49,359.33 points, down approximately 0.29% for the week; the S&P 500 Index dropped 0.06% to 6,940.01 points, losing about 0.38% over the week; and the Nasdaq Composite Index declined 0.07% to 25,529.26 points, down roughly 0.92% for the week. The VIX fear index rose 0.13% to 15.86, gaining 9.45% over the week. Sector performance was mixed, with strength in chips, real estate, and industrials, while pharmaceuticals, regional banks, and banking sectors led declines.

The Mag 7 index fell 0.30% on Friday and dropped 1.58% for the week, with Tesla, Meta, NVIDIA, and Google A closing down as much as 0.84%. Amazon and Microsoft, however, gained up to 0.70%. The Nasdaq Golden Dragon China Index fell 1.15% on Friday to 7,720.19 points, with Xiaomi dropping 3.5%, Alibaba falling about 3%, Meituan declining around 2%, and Tencent and JD.com both dropping more than 1%.

– European markets: European stock markets generally declined last Friday.

European stock markets generally fell last Friday. The pan-European STOXX 600 Index closed down 0.03% at 614.38 points, with a cumulative increase of 0.77% last week. The pan-European STOXX 50 Index closed down 0.19% at 6,029.45 points, with a cumulative increase of 0.53% last week.

Germany's DAX Index closed down 0.22% at 25,297.13 points, with a cumulative increase of 0.14% last week; the UK FTSE 100 Index closed down 0.04% at 10,235.29 points, with a cumulative increase of 1.09% last week; France's CAC40 Index closed down 0.65% at 8,258.94 points, with a cumulative decrease of 1.23% last week.

– Asia-Pacific markets: Major Asia-Pacific stock markets ended mixed last Friday.

Last Friday, major Asia-Pacific stock markets ended mixed. At the close, Japan’s Nikkei 225 Index fell 0.3% to 53,936.17 points; Japan’s TOPIX Index fell 0.3% to 3,658.68 points. South Korea’s KOSPI Index rose 0.9% to 4,840.74 points. For other major market indices, Singapore’s stock market rose 0.22% to 4,843.93 points, while Australia’s stock market rose 0.48% to 8,903.90 points.

– Hong Kong Stock Market: All three major Hong Kong stock indices fell.

Last Friday, all three major Hong Kong stock indices fell. At the close, the Hang Seng Index fell 0.29% to 26,844.96 points; the Hang Seng TECH Index fell 0.11% to 5,822.18 points; and the Hang Seng China Enterprises Index fell 0.50% to 9,220.81 points. Alibaba Health fell more than 5%, Tencent Music and Leapmotor fell more than 4%, Li Auto and Kingsoft Software fell more than 2%. Semiconductor and chip stocks bucked the trend and strengthened, with GigaDevice rising over 16%, Hua Hong Semiconductor rising over 7%, and SMIC rising over 2%.

– A-share Market: All three major A-share indices collectively closed lower last Friday.

Last Friday, all three major A-share indices collectively closed lower. At the close, the Shanghai Composite Index fell 0.26% to 4,101.91 points; the Shenzhen Component Index fell 0.18% to 14,281.08 points; and the ChiNext Index fell 0.20% to 3,361.02 points. In terms of sector performance, the semiconductor industry chain surged, with multiple stocks including SICC and TFME hitting their daily limit; robot concept stocks strengthened, with Wuzhou Xinchun and Founder Motor hitting their daily limit; and power grid equipment stocks rose sharply, with Sieyuan Electric and Jiacheng Electronics hitting their daily limit. AI applications, oil and gas, pharmaceuticals and medical treatment, and digital currency sectors led the declines.

Bonds>>>

– US Treasuries: US Treasury yields surged last Friday.

Last Friday, US Treasury yields surged as expectations for rate cuts next year declined, leading to a rise in yields. In late New York trading, the two-year US Treasury yield rose by 3.03 basis points to 3.5945%, with a cumulative increase of 6.24 basis points last week. The 10-year US Treasury yield rose by 5.75 basis points to 4.2269%, with a cumulative increase of 5.96 basis points last week.

– Non-US bond market: Eurozone government bond yields generally rose last Friday, while the weekly performance of 10-year bonds mostly fell.

Last Friday, the yields on 10-year Eurozone government bonds generally rose, with most seeing a decline on the weekly chart. By the end of the European session last Friday, the yield on 10-year German government bonds increased by 1.6 basis points to 2.835%, falling 2.8 basis points for the week. The yield on two-year German government bonds rose 1.3 basis points to 2.111%, with a weekly increase of 0.5 basis points. For the week, the yield on 10-year French government bonds fell 0.7 basis points, Italian government bonds dropped 4.4 basis points, and Spanish government bonds decreased by 3.1 basis points.

– Government bonds: China’s government bond market saw mixed results last Friday.

Last Friday, government bond futures showed mixed results. At closing, the 30-year main contract fell by 0.09%, the 10-year main contract rose by 0.01%, the five-year main contract gained 0.05%, and the two-year main contract increased by 0.03%.

Foreign exchange >>>

– US Dollar: The ICE US Dollar Index rose by 0.04% to 99.363 points.

The dollar rebounded from its daily low to its high after Trump expressed his hope that Kevin Hassett would remain as White House advisor, showing an overall volatile upward trend last week. By the end of the forex market last Friday, the ICE US Dollar Index rose 0.04% to 99.363 points, up 0.24% for the week. The Bloomberg Dollar Index increased by 0.01% to 1,211.75 points, remaining relatively flat on the week.

– Non-US currencies: Last Friday, the dollar showed mixed results against major currencies, falling about 0.3% against the yen.

Last Friday, the dollar showed mixed performances against major currencies, dropping approximately 0.3% against the yen. The dollar fell 0.3% against the yen to 158.16 yen, while the euro declined roughly 0.1% against the dollar to 1.1594 dollars.

– Renminbi: The dollar closed at 6.9678 yuan against the offshore renminbi last Friday.

By the end of the New York trading session last Friday, the dollar was at 6.9678 yuan against the offshore renminbi, down 46 points from the previous trading day (Thursday). The onshore renminbi was at 6.9680 yuan against the dollar, rising 59 points from the previous trading day.

– Cryptocurrency: The cryptocurrency market rose last week, with Bitcoin gaining nearly 5% over the week.

The cryptocurrency market was volatile last week. Bitcoin gained approximately 5% over the week, while Ethereum rose by 6.40%.

Commodities>>>

– Energy: Oil prices rose last Friday.

Oil prices rose last Friday as the market remained concerned about geopolitical tensions in places like Iran. Brent crude futures settled at $64.13 per barrel, up approximately 0.58%. U.S. crude futures settled at $59.44 per barrel, up about 0.42%.

– Precious Metals: Precious metals generally fell last Friday, but silver's weekly gain exceeded 10%.

Gold:Gold prices plunged last Friday after Trump released the latest news on Federal Reserve Chair candidates. In New York trading, spot gold edged down by 0.44%, closing at $4,595.23 per ounce, with a weekly gain of 1.91%. U.S. gold futures fell by 0.57%, settling at $4,597.00 per ounce, with a weekly increase of 2.12%.

Metals Futures Market:Precious metals generally declined last Friday, with silver’s weekly gain exceeding 10%. Spot silver dropped by 2.72% last Friday, closing at $89.9079 per ounce, with a weekly rise of 12.70%. U.S. silver futures fell by 2.82%, settling at $89.740 per ounce, with a weekly gain of 13.12%. U.S. copper futures dropped by 2.45% last Friday to $5.845 per pound, with a weekly decline of 0.96%. Spot platinum fell by 3.32% last Friday and was up 2.42% for the week. Spot palladium fell by 0.72% last Friday, with a weekly loss of 0.67%.

[Disclaimer]

The above content is provided by Harbor Family Office (hereinafter referred to as "Harbor Family Office") and is compiled from market information sourced from various channels. Neither Harbor Family Office nor its group members participated in the preparation of the content, nor have they expressly or implicitly endorsed or approved the content. This article is for reference only and does not constitute any investment or trading advice. Investment involves risks. Readers should independently evaluate and judge this material and are advised to consult professionals before making any investment or trading decisions. Without authorization, no one may reproduce, copy, or publish the content in whole or in part to the public by any means. Copyright belongs to Harbor Family Office and related providers.

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