South Africa’s rand made modest gains on Tuesday, bolstered by markets digesting the shifting stance on tariffs by U.S. President Donald Trump. By 15h18, the rand stood at 18.68 against the dollar, roughly 0.20% stronger than the previous day’s close. The dollar, meanwhile, was down by about 0.40% against a basket of currencies. On Monday, Trump suspended his threat of significant tariffs on Mexico and Canada, agreeing to a 30-day hiatus in exchange for concessions on border control and crime enforcement with the two neighbouring countries. On the Johannesburg Stock Exchange, the Top 40 index closed 1.10% higher, and South Africa’s benchmark 2030 government bond saw an improvement, with its yield dropping by 5.5 basis points to 9.09%.

In global markets, the S&P 500 rose by 0.50%, while the Nasdaq gained 1.10%, and the Dow Jones ended largely unchanged. Traders appeared to shrug off concerns over the trade war, instead focusing on fresh corporate earnings and key economic data. The 10% U.S. tariffs on Chinese imports took effect on Tuesday, triggering an immediate response from Beijing. However, markets remained cautiously optimistic, hoping to avoid further escalation. Meanwhile, U.S. job openings fell short of expectations, and factory orders dropped more than anticipated, further indicating that the Federal Reserve (Fed) has room to lower rates this year.

In the United Kingdom, the FTSE 100 extended its losses for a second session, weighed down by declines in the communications sector as investors remained fixated on U.S. trade policy. The FTSE 250 slipped around 0.30%. Vodafone bore the brunt of the losses, plummeting over 7% after reporting ongoing weakness in its key German market during the third quarter. Diageo, the spirits maker, fell more than 1.50% after withdrawing its medium-term sales growth target due to the impact of U.S. tariffs on tequila and Canadian whisky. The beverages sector as a whole dropped by approximately 1.50%.

Conversely, European stocks ended the day on a positive note, buoyed by strong corporate earnings and reduced concerns over the North American trade war. The Eurozone’s STOXX 50 climbed 1% to 5 268, and the STOXX 600 rose by 0.30% to 536. Trump’s decision to delay tariffs on Mexico and Canada fuelled hopes that trade restrictions between the North American neighbours could be avoided altogether, although he maintained softer tariffs on China. Banks led the European gains, with BNP Paribas and Intesa Sanpaolo up by 4.20% and 3.20%, respectively, following the release of their fourth-quarter earnings.

In Asia, Japan’s Nikkei 225 Index rose by 0.72% to 38 798, while the broader Topix Index gained 0.65% to 2 738, recovering some losses from the previous session. This rebound came after Trump’s decision to pause tariffs on Mexico and Canada, following discussions with their leaders. Investors in Japan are now focused on the release of wage figures on Wednesday, which could influence the Bank of Japan’s monetary policy outlook.

In the commodities market, WTI crude oil futures rebounded to just under $73 per barrel on Tuesday, after dipping to a session low of $70.65, driven by growing expectations that the U.S. would tighten sanctions on Iran. Meanwhile, gold continued its ascent, surpassing $2 840 per ounce, marking a fresh record high as concerns about tariffs from the world’s economic superpowers weighed on global growth prospects, fuelling demand for safe-haven assets.