Wall Street Hit By Software Sell-Off, Gold Hits 3-Week High

The S&P 500 fell over 1% on Monday amid tariff uncertainty surrounding Donald Trump, whose emergency trade measures were struck down by the Supreme Court. Asian markets rebounded Tuesday morning, with Japan and China gaining as investors digested tariff risks. AI-related manufacturers lifted Taiwan and South Korea benchmarks to fresh highs, pushing a broad Asia-Pacific index to a record. European futures were mixed in early trade.

Equities

The FTSE 100 closed virtually unchanged on Monday, slipping 0.02% after ending last week at record highs. Trade was subdued as investors weighed renewed uncertainty over US tariffs. The mid-cap FTSE 250 fell 0.9% by the close.

Among individual stocks, Johnson Matthey slumped 16.4% on Monday, the steepest fall on the FTSE 250, after agreeing to cut the sale price of its catalyst technologies division to Honeywell. The revision followed weaker-than-expected performance in the unit during the 2025 financial year.

Packaging group Mondi closed 4.3% lower as concerns grew that fresh US tariffs could hit transatlantic trade.

Precious metal miners helped limit losses on the main index, with the sector rising 5.2% to a record high as gold prices climbed to a three-week peak. Defence names pulled back after recent strength, while Rolls-Royce Holdings edged 0.2% lower despite weekend reports it may announce a share buyback of up to £1.5bn alongside annual results later this week.

In the US, markets fell sharply on Monday. The S&P 500 closed 1.04% lower, the Dow Jones Industrial Average dropped 1.66%, and the Nasdaq Composite lost 1.13%. Financial stocks led declines, while software shares also sold off heavily.

DoorDash shares fell 7% on Monday, while Uber dropped 3%. Salesforce declined 5%, with MongoDB and AppLovin sliding 8% and ServiceNow losing 4%, after Citrini Research published a blog with a scenario analysis highlighting potential risks from rapid advances in artificial intelligence. Payment giants Visa, Mastercard, and American Express also moved lower, each falling more than 4%.

Healthcare provided some support. Eli Lilly rose 4.9% by the close after trial data showed its obesity treatment Zepbound outperformed a rival drug from Novo Nordisk. In consumer stocks, Domino's Pizza climbed 4.1% after reporting fourth-quarter same-store sales ahead of expectations.

PayPal jumped 5.8% following a Bloomberg report that the group is attracting takeover interest. Meanwhile, airlines and travel shares fell sharply as a major winter storm disrupted flights across the north-east of the country.

Forex & Commodities

The Japanese yen weakened with the dollar rising to ¥155.1 as investors assessed renewed turbulence around US trade policy. The dollar index edged higher to 97.81, while the euro slipped to $1.178 and sterling held broadly steady at $1.349. The Australian dollar firmed to $0.7066 and the New Zealand dollar traded at $0.5962. China’s yuan touched its strongest level against the dollar in nearly three years.

The moves followed fresh warnings from Donald Trump that countries stepping back from recently agreed trade deals would face higher duties, after the Supreme Court blocked his use of emergency tariff powers. The administration is reportedly weighing additional national security tariffs on sectors including batteries and industrial materials. Japan has sought assurances that its existing agreement will not be diluted, while the European Parliament has delayed a vote on the EU-US trade deal.

Spot gold fell back to $5,180 per ounce this morning after rising above a three-week high in the previous session, with the firmer dollar weighing on prices. Silver traded at $88.19, platinum at $2,155 and palladium at $1,750.

Oil prices extended their advance, with Brent crude near $71.97 a barrel and US crude around $66.76, both close to seven-month highs. Traders are monitoring US-Iran tensions ahead of further nuclear talks in Geneva, while Washington has withdrawn non-essential staff from its embassy in Beirut.