Morning Bid: What tariffs? Investors soak up the dip

• South Korea's KOSPI initially fell over 1% but recovered to jump 2% to record highs as traders anticipated potential tariff rollback with Seoul's Industry Minister heading to the U.S.
• Gold climbed 1% to $5,063 per ounce and silver vaulted 5% to $109 per ounce as tariff uncertainty boosted safe-haven demand for precious metals.
• MSCI's Asia-Pacific index rallied 1% to a new record high ahead of earnings from U.S. tech giants Meta, Microsoft, and Tesla, while the Federal Reserve's Wednesday policy meeting faces scrutiny amid a DOJ investigation into Chair Jerome Powell.

Market Summary: Morning Bid - April 2025

Key Development:

President Trump unexpectedly raised tariffs on South Korea to 25% from 15%, targeting autos, lumber, and pharmaceuticals due to the country's failure to implement a July trade deal. Despite the announcement, South Korea's KOSPI initially dropped over 1% but recovered to close up 2% at record highs as investors bought the dip, betting on the "TACO" principle (Trump Always Chickens Out).

Market Performance:

• MSCI Asia-Pacific index rallied 1% to a new record high
• Japan's Nikkei gained 0.7% despite a strong yen (typically negative for exporters)
• European futures: EURO STOXX 50 up 0.3%
• U.S. futures: Nasdaq up 0.6%, S&P 500 up 0.3%

Commodities:

Tariff uncertainty boosted precious metals significantly:

• Gold climbed 1% to $3,063/ounce, approaching record highs above $3,100
• Silver surged 5% to $109/ounce

Corporate Focus:

Investor optimism centers on upcoming earnings from the "Magnificent Seven" tech companies, starting Wednesday with Meta, Microsoft, and Tesla results. Luxury earnings expected from LVMH and Christian Dior.

Central Bank Watch:

Federal Reserve policy decision Wednesday—no rate change expected. The meeting carries added intrigue due to a DOJ investigation into Chair Jerome Powell. Markets watching whether Powell indicates staying on as governor beyond May.

Market Implications:

Investors continue demonstrating resilience to tariff threats, viewing pullbacks as buying opportunities in 2025's best-performing markets while seeking safe havens in precious metals.