[Annual Lazy Summary] Full Analysis of Tariffs, US-Iran, and Financial Data: Seven Key Highlights for the Start of the Year!

What we want you to know:

Spring of the Year of the Horse, Finance M Square wishes everyone a successful start and good luck in the Year of the Horse!

During the holiday period (2/12 ~ 2/20), global markets did not pause. The three major U.S. stock indices initially fell and then rebounded amid software stock declines and rising AI bubble concerns, with sector performance diverging. On the political front, key developments occurred — the Supreme Court ruled on Trump’s tariffs, declaring IEEPA tariffs illegal. Trump responded by stating he would implement a 150-day, 10% temporary tariff under Section 122, expected to take effect from 2/24, adding policy uncertainty to the market.

On the eve of Taiwan stocks opening red, M Square has summarized the seven most critical events during the holiday to help you grasp the opening market trends in the Year of the Horse in advance!

Market Highlights During the Year:

• Stock Market: During the holiday, doubts about U.S. software stocks persisted, but most earnings reports exceeded expectations. The three major U.S. indices initially fell and then rebounded, ending with slight gains. European markets generally rose 1.5% to 3.0%. Asian markets showed clear divergence, benefiting from improved memory industry structure and long-term AI demand prospects, with South Korea’s KOSPI soaring 5.18% to a record high; Japan, India, and Hang Seng indices were weaker, declining about 1% to 2%. Funds are increasingly dispersed across various sectors, contrasting with the high concentration in AI-related tech stocks in 2025.

• Forex Market: Influenced by Q4 GDP, non-farm employment, and Federal Reserve meeting minutes, market expectations for a near-term Fed rate cut narrowed. During the holiday, the US dollar index slightly rebounded to 97.8, while other major currencies generally weakened, with the yen depreciating over 1.5%, a significant move. Although the Fed previously conducted a “currency check” on the yen, leading to a sharp yen appreciation, past experience suggests such “verbal warnings” ultimately do not change the yen’s depreciation trend.

• Bond Market: The U.S. 10-year Treasury yield fell back to around 4.1% during the holiday, with limited volatility.

• Commodities: Due to stalled negotiations between the U.S. and Iran, both sides showed tough stances, leading to WTI crude oil futures rising to $66 per barrel, and gold futures re-crossing the $5,000 per ounce mark, recovering some of the losses since the metal market crash at the end of January.

Note: The statistical period covers the close from 2/12 to 2/20 for global stocks, forex, bonds, and commodities. Note: USD/TWD and USD/JPY are quoted in American style; a decline in these numbers indicates TWD and JPY appreciating against the USD.

【USA】 Economic fundamentals remain stable, but significant divergence exists in Fed rate outlooks

【USA】 IEEPA tariffs ruled illegal! Trump swiftly imposes 10% replacement tariffs

【USA】 AI concerns trigger software valuation declines, funds rotate into non-AI sectors

【China】 Slow recovery in consumer spending during the year, still below pre-pandemic levels

【Japan】 Q4 GDP growth at 0.2%, inflation expected to fall below 2% as forecasted

【USA-Iran】 Tensions escalate, oil prices surge past $65 per barrel

【13F Institutional Holdings】 Institutional funds begin rotation, mainly in tech, energy, and minerals!

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