The rand weakened by 0.50% in early trading, settling at 18.47 against the US dollar, while the FTSE/JSE All Share Index rose by 0.75%, supported by news of an improved unemployment rate in the fourth quarter. Job gains in the finance and manufacturing sectors contributed to the unemployment rate falling to 31.90% in the three months ending December, down from 32.10% in the previous quarter—the lowest level since the third quarter of 2023. According to Statistics South Africa, employment increased by 132 000, raising the total number of employed individuals to 17.1 million. Simultaneously, the number of unemployed individuals declined by 20 000, reaching 8 million. 

The S&P 500 edged up 0.20% on Tuesday, closing at a new record, while the Nasdaq 100 and Dow Jones hovered near flat. Investors balanced optimism over a potential resolution to the Ukraine war with concerns about tariffs and interest rate developments. Meanwhile, the dollar index held steady around 107, supported by inflation worries spurred by President Donald Trump's escalating tariff threats. On Tuesday, Trump revealed plans for a 25% tariff on auto imports, alongside similar duties on semiconductors and pharmaceuticals. Geopolitical tensions further supported the dollar, particularly after the US excluded European nations from peace talks with Russia regarding the ongoing conflict in Ukraine. In terms of monetary policy, Federal Reserve officials reiterated their cautious stance on additional interest rate cuts, prioritising efforts to curb inflation.

European stocks continued their upward momentum on Tuesday afternoon, with both the STOXX 50 and STOXX 600 gaining 0.40% to hit new record highs. The rally was led by defence stocks, fuelled by expectations that European governments will ramp up military spending to support Ukraine. However, an informal summit in Paris among European leaders ended without concrete decisions, as the proposal to deploy peacekeeping troops to Ukraine remained highly divisive. Strengthening defence and aiding Ukraine is projected to cost Europe's major economies around $3.1 trillion over the next decade. Meanwhile, on the monetary policy front, the European Central Bank is expected to lower its deposit rate by 25 basis points at each of the next three meetings, bringing it down from the current rate of 2.75%.

The Shanghai Composite declined 0.93% to close at 3 324 points, while the Shenzhen Component slid 1.61% to 10 617 on Tuesday, as investors capitalised on the recent market rally spurred by enthusiasm over DeepSeek’s artificial intelligence advancements. Meanwhile, market participants evaluated the outlook after President Xi Jinping, in a closed-door meeting with prominent business leaders, pledged to support the private sector. Xi encouraged the business community to showcase their talent and confidence in China’s economic model amid intensifying global competition. This commitment signals a shift from the prolonged regulatory crackdown that had previously weighed on equity valuations.

Oil prices saw a slight increase following a drone strike on a Russian pipeline pumping station, which disrupted Kazakhstan's oil exports. Trading Economics reported that Brent crude rose to $75.37 per barrel on Tuesday, while US West Texas Intermediate (WTI) futures climbed to $71.41 per barrel. However, potential supply increases from OPEC+ and Russia, along with uncertain demand from China, capped further price rises.

In the gold market, prices rose as concerns over US President Donald Trump's tariff policies spurred safe-haven demand, fuelling fears of a global trade war. Spot gold gained 0.60%, reaching $2 914.75 per ounce, while US gold futures rose 0.9% to $2 927.90 per ounce. The surge was driven by significant central bank purchases and concerns over potential shortages in Europe as markets responded to efforts to prevent US tariffs.