Any reference to the AI-generated photo showing Trump kissing both of Musk’s right feet would be purely coincidental… But it’s mainly the weak U.S. economic data and Tesla’s sales that are dragging down the market, while European stocks are holding up.

What about the Trump effect?

The Conference Board’s Consumer Confidence Index came in at 98.3 in February, down from 105.3 in January (revised from 104.1). The expected figure was 102.7. This marks the sharpest monthly decline since August 2021.”

When consumers are asked about their situation in six months, we see that their outlook on the business environment has become negative. Pessimism regarding the labor market outlook has worsened, and consumers are less optimistic about their income prospects.

And Tesla is suffering from a tarnished image…

The Musk effect… Tesla saw its sales in the EU, the UK, and the European Economic Area drop by 45.2% year-on-year in January 2025. In contrast, the Chinese company SAIC Motors saw its sales increase by 36.8% over the same period… while awaiting the rise in customs duties promised by Europeans. According to ACEA statistics, in January 2025, sales of new battery electric vehicles rose by 34%, reaching a market share of 15%. Three of the four largest markets in the region, which together account for 64% of all battery electric car registrations, saw strong double-digit growth: Germany (+53.5%), Belgium (+37.2%), and the Netherlands (+28.2%), while France saw a slight decline of -0.5%. Sales of hybrid and gasoline cars dropped by 8.5% and 18.9%, respectively.

New Car Registrations by Manufacturer for the EU, EFTA, and UK Markets.

A Brief Look at the Financial Markets

European markets reacted relatively modestly, with the exception of the CAC 40. The Paris stock exchange lost 0.49%, while the DAX fell by 0.13%, and in London, the FTSE 100 gained 0.11%. The EuroStoxx 50 index closed down by 0.17%, the FTSEurofirst 300 rose by 0.14%, and the Stoxx 600 gained 0.13%. The hardest-hit sector was technology, suffering from Trump’s comments on semiconductors and China. STMicroelectronics dropped by 2.2%, ASML by 2.3%, and ASMI by 2.9%. In Switzerland, the SMI finished up 0.55%, thanks to the strong performance of Novartis (+2.4%), good results from Lindt (+2.0%), and Nestlé (+1.4%).

Tech stocks weighed on the U.S. market. While the Dow Jones gained 0.37%, the S&P 500 fell by 0.47%, and the Nasdaq dropped by 1.35%. Nvidia lost 2.8% ahead of its highly anticipated quarterly earnings release, while press reports indicated that the U.S. administration intends to further restrict semiconductor exports to China. Zoom Communications declined by 8.5% after issuing a disappointing annual forecast.

Bond Market

German 10-year Bunds eased slightly to 2.455% (-1.5 basis points), while the French OAT for the same maturity dropped by 2.2 basis points to 3.198%, resulting in a narrowing spread to 74 basis points. U.S. Treasury yields came under pressure due to bets on a Federal Reserve easing, with the benchmark 10-year yield falling to a two-month low of 4.283%. The 2-year yield decreased by 1 basis point to 4.086%, and the 30-year yield stood at 4.565%.

The Dollar’s Struggles

The dollar is suffering from this situation. The Dollar Index dropped by 0.25% to 0.30%, while the Euro strengthened by 0.4% to 1.0510 USD, the Pound rose by 0.35%, the Swiss Franc gained 0.50%, and the Yen climbed by 0.4%.

Precious Metals

Spot gold was up by 0.1% at 2,918.01 dollars per ounce. Silver remained stable at 31.74 dollars per ounce, platinum fell by 0.3% to 964.00 dollars, and palladium rose by 0.3% to 930.73 dollars.

Commodities

Oil prices dropped significantly, with Brent falling by 2.45% to 72.95 dollars per barrel, and West Texas Intermediate (WTI) declining by 2.55% to 68.90 dollars. Wheat followed corn’s downward trend as weather threats to northern hemisphere winter crops eased, while soybean futures were mixed in a volatile market.

Bitcoin’s price fell by 6% to 88,333.09 dollars, according to Coin Metrics. Earlier, it had dropped to 85,899.99 dollars, its lowest level since November. The plunge in Bitcoin triggered a wave of liquidations, forcing traders to sell their assets at market prices to settle their debts. Centralized exchanges recorded 697.6 million dollars in long liquidations in the last 24 hours, according to CoinGlass. The Trump effect fades…

This Morning in Asia

The MSCI Asia-Pacific index excluding Japan rose by 0.63% on Wednesday, boosted by a rally in Chinese markets. The Hang Seng index surged by more than 2%, the Hang Seng Tech index gained 2.7%, and the CSI300 index of large-cap stocks rose by 0.54%, while the Shanghai Composite index gained 0.7%. On the other hand, the Nikkei dropped by 1.15%.

Oil prices regained some color, with Brent up by 0.34% and WTI rising by 0.35%. Copper prices in London climbed on Wednesday, following a weak dollar after U.S. President Donald Trump ordered an investigation into potential new tariffs on copper imports, aimed at boosting U.S. production of the metal. Three-month copper on the London Metal Exchange (LME) rose by 0.6%. Among other metals, LME aluminum fell by 0.06%, LME zinc added 0.2%, nickel rose by 0.3%, lead gained 0.4%, and tin dropped by 0.6%.