Wall St ends lower as White House says Trump to implement tariffs

NEW YORK – US stocks ended lower on Friday, with indexes losing ground after the White House said US President Donald Trump will implement tariffs of 25% on Canadian and Mexican imports and 10% on Chinese goods.

Investors have been bracing for further tariff news after Trump has repeatedly warned about using the measure. Uncertainty over the impact of tariffs has muddled the outlook for the economy and inflation.

“I would have thought the market would be down more,” said Rick Meckler, partner at Cherry Lane Investments, a family investment office in New Vernon, New Jersey. “It’s not just the announcement itself, which I think probably impacts a select number of industries. It’s whatever retaliation moves are taken.”

Stocks turned lower on Friday afternoon after the White House said the tariffs against Canada, Mexico and China would take effect on Saturday.

Friday capped a heavy week of quarterly results from US companies as well. Apple shares ended down 0.7%. They were higher early in the session after the company gave upbeat executive comments in its earnings on Thursday, in a sign it expects to recover from a dip in iPhone sales as it rolls out artificial intelligence features.

Energy led declines among S&P 500 sectors on Friday, with Chevron shares falling 4.6% after the company reported fourth-quarter earnings below estimates and Exxon Mobil easing 2.5% after its quarterly results.

The Dow Jones Industrial Average fell 337.47 points, or 0.75%, to 44,544.66, the S&P 500 lost 30.64 points, or 0.50%, to 6,040.53 and the Nasdaq Composite lost 54.31 points, or 0.28%, to 19,627.44.

Indexes registered gains for the month of January, with the Dow up 4.7%, the S&P 500 up 2.7%, and the Nasdaq up 1.6%.

For the week, the Dow was up 0.3%, but the S&P 500 declined 1% and the Nasdaq fell 1.6%. Tech shares sold off on Monday after Chinese startup DeepSeek unveiled a breakthrough in cheap AI models.

Early in Friday’s session, economic data reinforced expectations that the Federal Reserve would keep interest rates unchanged for longer.

Reports showed strong US consumer spending and a moderate increase in inflation in December.

“Clearly, it makes total sense that the Fed didn’t do anything this week, and it makes sense (Fed Chair) Jay Powell would say they’re not in a hurry to lower rates,” said Scott Wren, senior global market strategist at Wells Fargo Investment Institute in St. Louis, Missouri.

The Fed left rates unchanged in its policy announcement on Wednesday, and Powell said the US central bank wants to see further progress in inflation before cutting rates.

After the closing bell, Trump said he expects his administration to impose tariffs related to oil and gas around Feb. 18. But he did not name a specific country to which the tariffs would apply or specify any more details about the plans.

Declining issues outnumbered advancers by a 2.3-to-1 ratio on the NYSE. There were 231 new highs and 54 new lows on the NYSE.

On the Nasdaq, 1,491 stocks rose and 2,913 fell as declining issues outnumbered advancers by a 1.95-to-1 ratio.

Volume on US exchanges was 15.78 billion shares, compared with the 15.5 billion average for the full session over the last 20 trading days.

(Reporting by Caroline Valetkevitch in New York; Additional reporting by Shashwat Chauhan and Sukriti Gupta in Bengaluru; Editing by Arun Koyyur and Matthew Lewis)

Gold surges past USD 2,800 as tariff threats reignite record rally

Gold prices surpassed the key USD 2,800 mark for the first time on Friday, fuelled by a rush to safety following US President Donald Trump’s tariff threats, which heightened concerns about global economic growth and inflationary pressures.

Spot gold rose 0.3% to USD 2,801.29 per ounce by 01:41 p.m. ET (1841 GMT), after hitting a record peak of USD 2,817.23 earlier in the session.

US gold futures settled 0.4% lower at USD 2,835, trading a premium to spot gold rates.

“There’s a lot of uncertainty out there right now and also wait-and-see attitude on the geopolitical stage with tariffs,” said Bob Haberkorn, senior market strategist at RJO Futures.

Trump has set a Saturday deadline to slap a 25% tariff on imports from Canada and Mexico and said he was still considering new tariffs on Chinese goods.

Bullion, a preferred asset during times of economic and geopolitical turmoil, is on track to record its best monthly performance since March 2024, rising nearly 7% so far. The metal surpassed multiple record peaks last year.

Additionally, “the mixed signals we’re getting from the Fed and the Trump administration right now is causing uncertainty in the market … Trump wants to cut interest rates, while the Fed wants to hold them steady,” Haberkorn added.

Earlier this week, Federal Reserve Chair Jerome Powell said there would be no rush to cut interest rates again, contradicting Trump’s earlier calls saying he wants borrowing costs to be lowered.

US prices increased in December while consumer spending surged, suggesting that the Fed could delay cutting interest rates for some time this year.

Among other metals, spot silver fell 0.8% to USD 31.42 after hitting an over one-month high on Thursday.

“We expect this strength in (silver) prices to attract subsequent discretionary trader interest, given this cohort remained nearly flat as of last week, with gold printing new all-time highs and the (gold-to-silver) ratio remaining at elevated levels,” TD Securities said in a note.

Platinum firmed 1% to USD 975.80, while palladium rose 2.2% to USD 1,011.

All three metals were headed for monthly gains.

(Reporting by Anmol Choubey and Swati Verma in Bengaluru; Editing by Shailesh Kuber, Tasim Zahid, and Mohammed Safi Shamsi)

Trump tariff uncertainties push gold to record high

Jan 31 (Reuters) – Safe-haven demand due to geopolitical uncertainties and concerns over global economic growth amid US President Donald Trump’s tariff plans have hoisted gold prices to a record high, once again bringing the key USD 3,000 threshold onto investors’ radar.

Spot gold climbed to a record high of USD 2,798.40 a troy ounce on Thursday, starting 2025 with fresh vigor after logging its strongest annual performance since 2010 last year.

“There’s concerns that some of the (economic) growth may come down because of the policies and tariffs that the current administration is looking to implement,” said Phillip Streible, chief market strategist at Blue Line Futures.

“So when you’ve got higher inflation and lower growth, stagflation becomes the economic theme. Gold tends to work very well in that particular environment.”

Trump’s tariff plans are widely perceived as inflationary and with potential to trigger trade wars, driving up safe-haven demand for bullion as it is traditionally seen as a hedge against price pressures and geopolitical uncertainty.

“I can see (gold) trying to reach up to that USD 2,900 level at some point during the first quarter; after we breach that, we’ll set new levels,” said Bob Haberkorn, senior market strategist at RJO Futures.

“At some point this year, gold could ultimately trade north of USD 3,000.”

The US market

Amid concerns about the U.S. import tariff plans, the U.S. gold futures have been trading at a premium to the spot price for several months and widened the price spread again on Thursday.

In a sign of these concerns, 12.9 million troy ounces of gold were delivered to COMEX-approved warehouses GC-STX-COMEX since late November, raising stocks there by 73.5% to 30.4 million ounces, the highest since July 2022.

The deliveries came from London, Switzerland and other major gold-trading hubs.

The London Bullion Market Association said on Thursday that it was monitoring the situation and liaising with CME Group and US authorities.

London gold market stocks and liquidity remain strong with the average daily trade volume since the start of January is 47.1 million ounces, the association added.

Gold and the US rate expectations

Gold hit multiple record peaks last year, bolstered by the Federal Reserve’s rate-cutting cycle, safe-haven demand and robust central bank buying.

The Fed, in its January meeting kept benchmark interest rates unchanged as widely expected, after easing a full basis point in 2024. This marks the first pause since the start of its easing cycle in September.

The non-yielding bullion tends to thrive in a low-interest rate environment.

As to purchases by central banks, the People’s Bank of China has been a key driver of gold demand as it kept on adding bullion to its reserves over the past year despite the price growth – in what analysts see as the PBOC’s broader strategy to diversify the reserves.

Analysts suggest that continued purchases by China’s central bank could provide further support to gold prices in the coming months.

Editing by Lisa Shumaker)

Weak growth, ECB boost traders’ euro area rate cut confidence

LONDON, Jan 30 (Reuters) – Traders grew more confident on Thursday that the European Central Bank would deliver three more rate cuts this year, as weak growth data followed by the bank’s latest rate reduction highlighted the need for more easing.

The ECB cut rates by 25 basis points (bps) to 2.75%, as expected, and kept the door open to further policy easing, helping push two-year German bond yields to three-week lows around 2.18%.

The decision came hot on the heels of data showing the euro zone economy unexpectedly stagnated last quarter, falling short of expectations for a 0.1% expansion, as two straight years of contraction in Germany weighed on the bloc as a whole.

That added to the gloom as US President Donald Trump’s tariff threats cast a shadow over an already sluggish euro zone economy, though he has so far not imposed blanket tariffs as feared.

Traders became more confident that the ECB would deliver three more rate cuts this year, now expecting around 70 bps of cuts by year-end, meaning more than an 80% chance of three cuts.

Last Friday, markets priced around a 60% chance of three moves.

“The ECB meeting was a tad dovish, with the mention of headwinds to growth, or at least it was not hawkish,” said Barclays’ head of euro rates strategy Rohan Khanna, adding that Thursday’s growth data was also below the ECB’s expectations.

Euro zone bond yields were broadly lower. Germany’s two-year yield, sensitive to rate expectations, was set for its biggest daily fall since late November, down around 8 bps in late trade.

Ten-year Bund yields fell 6 bps to 2.52%, while Italy’s 10-year yields dropped to 3.58%, the lowest in a week.

The euro, which usually takes a hit from rising rate-cut bets, was 0.1% higher on the day as the dollar weakened on the back of weaker-than-expected US growth data.

Europe’s STOXX 600 equity index was up 0.8%, relatively unmoved by the growth data or the ECB. An index of euro zone bank stocks held near the highest since 2011 it rose to earlier.

Bleak outlook

With the bloc facing a bleak outlook, some analysts said the ECB would have to cut rates below the 2% that markets expect to see by year-end. A 2% deposit rate falls in line with estimates for the so-called neutral rate in the euro zone, which neither restricts nor boosts growth.

“We expect to see developments on the tariff front in coming weeks. This will be a critical driver of ECB policy going forward,” said Salman Ahmed, global head of macro and strategic asset allocation at Fidelity International, who expects the ECB to cut rates to 1.5% by year-end, as concerns around global trade tensions weigh.

“But what happens after that… we still have to see,” he said.

A further ECB cut is likely to go through in March without much resistance among policymakers before the debate between them on further easing becomes more heated, possibly implying an April pause, three of them told Reuters on Thursday.

Traders see an April move as a coin toss, assuming the ECB cuts rates in March.

The bank’s Thursday move also reinforced policy divergence between the euro zone and the United States, where the Federal Reserve held rates steady on Wednesday and said there was no rush to cut them again.

The closely-watched premium 10-year US Treasury yields pay over German peers, which signals the difference in economic outlook between the two regions, rose back above 200 bps.

It dropped below that level for the first time since November earlier this week as German bond yields have risen in January while Treasury yields fell.

(Reporting by Yoruk Bahceli, Samuel Indyk, Dhara Ranasinghe, and Stefano Rebaudo, writing by Yoruk Bahceli; Editing by Amanda Cooper, Dhara Ranasinghe and Alex Richardson)

Trump tariff grenade threatens market calm

Jan 31 (Reuters) – A look at the day ahead in Asian markets.

A tumultuous week rounds off with investors in Asia taking their cue from more US ‘Big Tech’ earnings, digesting Fed Chair Jerome Powell’s guidance from earlier in the week, but bracing for US tariff-related volatility.

The global macro backdrop is broadly supportive, after the European Central Bank‘s rate cut and indication of more to come, the Bank of Canada‘s cut earlier this week, and expectations the Bank of England will ease next week.

But just before the Wall Street close on Thursday President Donald Trump said the US could slap 25% tariffs on Mexico and Canada. Trump had said Saturday would be tariff decision day – could China be targeted too?

On the corporate front, Apple shares were under pressure in volatile after-hours trading on Thursday after the company announced its latest results. The direction they eventually take could give Asian markets a cue on Friday.

It’s been a mixed bag for the ‘Magnificent 7’ this week. Nvidia shares got hammered on Monday by the DeepSeek news, shares in Microsoft fell sharply on Thursday after the firm’s results, while shares in Tesla and Meta rose in the wake of their earnings releases.

Another plank of the US tech story took an Asian twist on Thursday after the Wall Street Journal reported that Japan’s Softbank is in talks to invest USD 40 billion in OpenAI, more than had previously been mooted.

Markets in China are closed on Friday for the Chinese New Year holidays, and markets in South Korea and Taiwan are closed too. Liquidity across Asia will be lighter than normal.

Japanese markets will be more active though. After the Bank of Japan last week raised rates to a 17-year high of 0.5% and upped its inflation forecast, domestic assets will be sensitive to the latest retail sales, industrial production, unemployment and Tokyo inflation data on Friday.

In general, the mood music across markets is pretty upbeat, especially bearing in mind how discordant it was after the Deepseek-fueled turmoil on Monday.

The S&P 500 is only down 0.5% on the week and the Nasdaq is off 1.3% – hardly disastrous moves given the nervousness on Monday that a much more severe correction was on the cards. Indeed, the equal-weighted Nasdaq is in the green.

The global picture is even brighter. The MSCI World index goes into Friday flat on the week and hovering around its all-time high, the MSCI Asia ex-Japan is also steady, while euro and UK stocks are roaring to record highs.

Monday’s turmoil and rebound is reminiscent of the yen volatility shock from last August – fears of a yen carry trade unwind slammed stock markets on Aug. 5, yet they recovered within days. Many haven’t looked back since.

Here are key developments that could provide more direction to markets on Friday:

– Japan retail sales, industrial production, Tokyo CPI

– Australia producer price inflation (Q4)

– Thailand trade (December)

(By Jamie McGeever
Editing by Deepa Babington)

Wall Street ends down; Fed holds rates steady

NEW YORK – US stocks ended lower on Wednesday, but off their lows of the day, with the Federal Reserve holding interest rates steady as expected and Fed Chair Jerome Powell offering soothing comments for investors.

Technology shares were the biggest drag on the S&P 500. Nvidia shares fell 4.1% and Microsoft finished 1.1% lower on Wednesday, two days after a tech selloff sparked by Chinese startup DeepSeek‘s launch of AI models it said were cost-effective and ran on less advanced chips compared to US-based OpenAI.

Stocks initially extended losses after the Fed statement, with the Nasdaq at one point down more than 1% in afternoon trading.

The US central bank dropped language saying inflation “has made progress” towards the Fed’s 2% inflation goal, noting only the pace of price increases “remains elevated.”

Its decision to hold the policy rate steady was widely anticipated following three consecutive rate cuts in 2024 that reduced the Fed’s benchmark rate by a full percentage point.

Indexes pared losses as Powell began to speak at a press conference following the release of the policy statement. He said, “we do not need to be in a hurry to adjust our policy stance” and monetary policy is “well positioned” for the challenges at hand.

“Powell does a great job of calming markets,” said Jake Dollarhide, chief executive officer of Longbow Asset Management in Tulsa, Oklahoma, adding that “a strong economy gives the Fed plenty of wiggle room.”

The Dow Jones Industrial Average fell 136.83 points, or 0.31%, to 44,713.52, the S&P 500 lost 28.39 points, or 0.47%, to 6,039.31 and the Nasdaq Composite lost 101.26 points, or 0.51%, to 19,632.32.

“The Fed didn’t hit the markets with any surprises,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.

Powell also said it is too soon to say what President Donald Trump’s policies will do and the central bank will take its time assessing what the new government policy regime means.

Investors have been worried about Trump’s proposed tariffs, which could exacerbate inflationary pressures and slow the pace of rate cuts.

The Fed gave little insight into when further reductions in borrowing costs may take place.

Traders are pricing in around 44 basis points of cuts by year-end, down from around 48 basis points before the Fed statement. That reflects falling confidence that the US central bank will make two 25 basis point rate reductions this year.

The December reading of the personal consumption expenditures price index, a crucial metric in assessing the inflation trajectory, is due on Friday.

After the closing bell, Microsoft reported slower-than-expected growth in its crucial Azure cloud business despite beating estimates for overall quarterly revenue. Its shares were down 1.5% in after-hours trading.

During the regular session, shares of cloud services company F5 jumped 11.4% after it forecast second-quarter revenue above estimates and reported a first-quarter revenue beat.

Declining issues outnumbered advancers by a 1.6-to-1 ratio on the NYSE. There were 151 new highs and 68 new lows on the NYSE.

On the Nasdaq, 1,829 stocks rose and 2,548 fell as declining issues outnumbered advancers by a 1.39-to-1 ratio.

Volume on US exchanges was 13.00 billion shares, compared with the 15.5 billion average for the full session over the last 20 trading days.

(Reporting by Caroline Valetkevitch; additional reporting by Shashwat Chauhan and Sukriti Gupta in Bengaluru; Editing by Shounak Dasgupta, Arun Koyyur, Pooja Desai and Aurora Ellis)

Oil prices settle down as US stockpile grows, tariffs still in focus

Oil prices fell on Wednesday, with the US benchmark settling at its lowest year to date, after domestic crude stockpiles in the world’s top petroleum producer and consumer rose more than expected last week.

Brent crude futures settled down 91 cents, or 1.2%, at USD 76.58 a barrel. US crude futures fell USD 1.15, or 1.6%, to USD 72.62, their lowest settlement price so far this year.

Crude oil stockpiles in the US rose by 3.46 million barrels last week as refiner intake slumped for a third consecutive week, data from the Energy Information Administration showed.

Analysts polled by Reuters had expected a 3.19-million-barrel increase.

The White House on Tuesday reaffirmed President Donald Trump’s plan to impose 25% tariffs on imports from Canada and Mexico from Feb. 1. Near-term oil trade should remain choppy as investors digest the tariff threats, sanctions on Russian energy flows, and economic growth concerns in top consuming nations, UBS analyst Giovanni Staunovo wrote to clients on Wednesday.

“Considering the many prevailing uncertainties, we think a prudent approach is still warranted,” Staunovo wrote. “While we expect prices to stay supported at current levels, news flow related to Trump is likely to drive volatility in the near term.”

The US Federal Reserve held interest rates steady on Wednesday. The Fed gave little insight on when it plans to lower borrowing costs, which could boost economic activity and oil demand.

Traders are also looking ahead to an OPEC+ ministerial meeting scheduled for Feb. 3, with the group’s plan to increase supply from April in focus.

Trump last week called on OPEC+ to lower oil prices. The group has yet to respond, but delegates said policy changes are unlikely at the February meeting.

Supply concerns have eased after Libya’s National Oil Corp said on Tuesday that export activity was running normally after it held talks with protesters who had demanded a halt to loadings at one of the country’s main oil ports.

“Libyan supplies will remain a risk as the country remains engaged in a civil war, but for now, the risk has been mitigated temporarily,” StoneX analyst Alex Hodes said.

(Reporting by Shariq Khan
Additional reporting by Arunima Kumar, Naveen Thukral and Yuka Obayashi
Editing by Jason Neely, David Goodman, Christina Fincher, Nia Williams, Leslie Adler and David Gregorio)

ECB to cut interest rates, keep door open to further easing

FRANKFURT – The European Central Bank is all but certain to cut interest rates on Thursday and is likely to keep open the door to further policy easing as concerns over lackluster economic growth supersede worries about persistent inflation.

The ECB lowered borrowing costs four times last year and up to four moves are anticipated in 2025, driven by arguments that the biggest inflation surge in generations is nearly defeated while the economy demands relief.

With the euro zone suffering through an industrial recession and weak consumption, the case for a cut is so clear that none of the ECB’s 26 policymakers have publicly pushed back.

That could mean a unanimous vote for a 25 basis point cut to take the deposit rate to 2.75%, its lowest since early 2023, even after the U.S. Federal Reserve, the world’s largest central bank, paused its own easing cycle on Wednesday.

While ECB President Christine Lagarde is unlikely to commit explicitly to more cuts, she is likely to argue that the direction of policy remains clear and that the risk of a trade war with the United States could sap weak growth even more.

“Inflation is approaching the target in a more sustainable manner, the economic outlook remains challenging, while rates clearly remain in restrictive territory,” Nordea economist Jan von Gerich said. “The process of gradual normalization thus remains incomplete.”

Inflation, which rose to 2.4% in December, could still take a few months to ease back to the ECB’s 2% goal but there is little to challenge the narrative that all is on track.

Wage growth is easing, the labour market is softening, oil prices have come off early-year highs and the dollar’s relentless firming seems to have stopped for now.

A few voices are still likely to argue that pressure on services costs remains too high for comfort but that is more an argument for gradualism than for a pause.

Complications

But with a debate already starting on where the ECB’s rate cuts should end, consensus may be more difficult to maintain with each future cut.

New U.S. President Donald Trump’s policies could also make the environment more volatile. His threatened trade tariffs would weigh on growth but any retaliatory measures by the European Union would risk pushing up inflation.

Trump last week demanded that the Fed cut interest rates but the bank resisted on Wednesday, arguing that inflation was still elevated and it was not in a hurry to cut borrowing costs, a signal taken by markets to suggest that a longer pause may be ahead.

Any escalation of the war of words between them might rattle financial markets.

At 2.75% the ECB’s deposit rate would be approaching the 1.75% to 2.50% range considered “neutral”, neither fueling nor dampening economic activity. But any Trump-induced volatility could intensify calls for the ECB to go below this rate and start stimulating growth.

“There is a strong case to take official rates to the lower end of the range of estimates for neutral by mid-2025, with risks tilted towards the potential impact of trade frictions leading to considering even slightly lower rates,” economist Antonio Villarroya at Santander CIB said.

A trade war would shake already weak confidence.

Consumers are saving up cash, industry is shrinking, governments have modest buffers to spend and exports – long the driving force behind growth – are barely expanding.

“In an environment characterized by weak domestic demand, elevated uncertainty, and still-restrictive monetary policy, firms are likely to continue holding back on investment, which we expect to contract further in the first half of 2025,” Barclays economist Mariano Cena said.

But inflation is still above the ECB’s target and poor productivity growth along with labour shortages could keep up price pressures, likely limiting just how far the bank can go.

Foreshadowing the upcoming debate on pausing, board member Isabel Schnabel, an outspoken policy hawk, said the ECB was getting closer and closer to the point where it must debate how much more it can cut.

(Editing by Catherine Evans)

US recap: Dollar mixed as risk aversion slams tech

The dollar index fell with Treasury yields on Monday as concerns about China challenging US AI dominance weighed on technology stocks.

The yen and Swiss franc held earlier gains as havens to the tech market sell-off.

Chinese startup DeepSeek, the company threatening US rivals with a low-cost AI model, said it will temporarily limit registrations due to a cyberattack.

Risk aversion and a strong 5-year auction sent US Treasury yields lower though US new homes sales exceeded expectations and the Dallas Fed manufacturing index improved in January.

Focus midweek is on tech earnings, Q4 GDP, and the outcome of Wednesday’s Fed policy meeting. The US central bank is seen holding it policy rate steady at 4.25%-4.5%.

EUR/USD pared gains after rising above its 20-day upper Bollinger to a 1-1/2-month high of 1.0535. The European Central Bank is expected to lower its policy rate by 25 basis points on Thursday, potentially hampering bullish momentum. A rise above 1.06 is considered bullish with nearby support seen at 1.0450.

GBP/USD was little changed during the session. A dearth of UK data this week will likely see the pair move according to month-end flows and US risks. British Prime Minister Keir Starmer and US President Donald Trump agreed to meet soon after a cordial call on Sunday.

USD/JPY steadied above its daily cloud top at 153.88 as downward momentum stalled and a spike in yen volatility abated. The pair needs to eclipse its 55-DMA at 154.97 to neutralize bears. Japan will eye services PPI on Tuesday.

Treasury yields fell 7 to 10 basis points. The 2s-10s curve was down about 1 basis point to +33.7bp.

The S&P 500 slid 1.8% fueled by falling tech shares.

Oil fell about 2.3% pressured by demand worries amid sliding equity prices.

Gold fell 1.2% while copper slid 2.5% as weak China manufacturing data sparked demand worries ahead of the Lunar New Year holiday.

Heading toward the close: EUR/USD -0.08%, USD/JPY -1.04%, GBP/USD +0.05%, AUD/USD -0.49%, DXY -0.04%, EUR/JPY -1.07%, GBP/JPY -1.00%, AUD/JPY -1.48%.

(Editing by Burton Frierson; Reporting by Robert Fullem)

Oil hits 2-week low as China’s DeepSeek AI spurs demand fears

NEW YORK – Oil prices fell about 2% to a two-week low on Monday as news of surging interest in Chinese startup DeepSeek’s low-cost artificial intelligence (AI) model prompted concerns over energy demand to power data centers.

Before the news of DeepSeek broke, oil was already trading lower on weak economic data from China and worries that US President Donald Trump’s proposed tariffs could further pressure economic growth and energy demand.

Brent futures fell USD 1.42, or 1.8%, to settle at USD 77.08 a barrel, while US West Texas Intermediate (WTI) crude ended USD 1.49, or 2.0%, lower at USD 73.17.

Brent closed at its lowest since Jan. 9 and WTI at its lowest since Jan. 2.

Chinese startup DeepSeek’s AI Assistant overtook US rival ChatGPT to become the top-rated free application available on Apple’s App Store in the US That fed doubts among investors who have poured money into US energy firms hoping AI would drive demand for energy to power data centers.

“The DeepSeek model is (reported to be) more energy and capital efficient, which calls into question the significant electric demand projections for the US,” analysts at Jefferies, an investment bank, said in a report, noting AI represents about 75% of overall US demand forecasts through 2030-2035 in most projections.

“It is still early to draw conclusions on the outlook in the immediate aftermath of DeepSeek, but the 20%(-plus) YTD (year-to-date) rally in power companies looks exposed,” Jefferies said.

In other news from China, the world’s second biggest economy behind the US, manufacturing data was weaker than expected, adding fresh concerns over energy demand.

“The weak readings highlight the need for more policy efforts to stabilize economic growth,” analysts at Citibank said in a report.

TRUMP ON TARIFFS AND OPEC

Analysts said oil prices have been depressed in recent days following President Trump’s call last week for the Organization of the Petroleum Exporting Countries to reduce oil prices.

“President Trump continued to put the pressure on OPEC … calling on the producer group to lower prices to help end the Russian war in Ukraine,” Bob Yawger, director of energy futures at Mizuho, said in a report.

OPEC and its allies including Russia in the OPEC+ group have yet to react to Trump’s call, with OPEC+ delegates pointing to an existing plan to start raising oil output from April.

Trump’s tariff threats have also mostly pressured oil prices, feeding worries that a trade war could hurt global economic growth and oil demand.

Over the weekend, the US threatened and then swiftly reversed plans to impose sanctions and tariffs on Colombia after the South American nation agreed to accept deported migrants from the US

Colombia last year sent about 41% of its seaborne crude exports to the US, data from analytics firm Kpler shows. The agreement will allow that oil to continue to flow, another factor pressuring crude prices on Monday.

(Reporting by Scott DiSavino, Anna Hirtenstein, and Robert Harvey; Additional reporting by Florence Tan; Editing by Marguerita Choy and David Gregorio)

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