Business
American share prices were heading towards their fourth consecutive week of losses, with markets spooked by Donald Trump’s erratic protectionism and the prospect of slowing economic growth. The S&P 500 index has fallen by 9% since a peak in February. Investors are seeking shelter elsewhere: over the same period, Europe’s Stoxx 600 has risen by 2% in dollar terms, as has Hong Kong’s Hang Seng.
It was another turbulent week for trade policy. Mr Trump imposed new 25% levies on all steel and aluminium products imported into America. Similar tariffs implemented during Mr Trump’s first term had a lower rate for aluminium and exemptions for several trading partners; the new ones do not. Canada’s Ontario province retaliated with a 25% surcharge on power exports to America; Mr Trump hit back with an additional 25% charge on Canadian metals. Both were cancelled in short order. Canada then announced tariffs on $21bn-worth of American goods that remain uncancelled.
The European Union responded with its own tariffs on American exports worth €26bn ($28bn) per year. They include levies of up to 50% on bourbon whisky, jeans and Harley-Davidson motorcycles. The new charges are due to come into force in April.
Time to cool down
America’s jobs report showed its economy had added 151,000 jobs in February—more than in January, but fewer than forecasters had expected. Its inflation release, meanwhile, showed consumer-price rises had slowed to 2.8% in the year to February, suggesting the Federal Reserve may be able to cut interest rates sooner than expected. Jerome Powell, the Fed’s chairman, said it is not “in a hurry” and that America’s economy is “in good shape”.
China’s consumer-price index fell by 0.7% in the year to February, the first time it had registered such deflation in 13 months. The figures may have been distorted by the lunar new year holiday, during which prices tend to increase, and which fell earlier than usual.
Goodbye, widowmaker
Traders are increasingly confident that Japan has broken out of its long deflationary slump. The yield on ten-year government bonds rose to nearly 1.6%, a level it last reached in 2008.
The Bank of Canada lowered its policy rate by 0.25 percentage points, to 2.75%. It was the central bank’s seventh rate cut in a row, and came after annual inflation had reached 1.9%. Officials, however, worried about the impact of American tariffs and warned that “monetary policy cannot offset the impacts of a trade war”.
Northvolt, a Swedish battery-maker, filed for bankruptcy after failing to agree on a new financing package with investors. The firm was founded in 2016 and was once Europe’s best-funded startup, touted as the continent’s champion in an industry dominated by Chinese firms.
OpenAI, the designer of ChatGPT, struck a deal worth $12bn with CoreWeave, a cloud-computing firm originally set up in 2017 to “mine” cryptocurrencies. CoreWeave will supply OpenAI with computing power to train and run its artificial-intelligence models for the next five years. The deal is part of OpenAI’s efforts to reduce its dependence on Microsoft, its biggest partner. Google DeepMind unveiled its new “Gemini Robotics” AI model, which aims to help robots navigate complex, real-world environments.
Elon Musk had a trying week. X, his social-media website, suffered a cyber-attack that disrupted its service. Mr Musk claimed, without much evidence, that it came from “the Ukraine area”. Tesla’s share price fell by 15% on March 10th and is nearly 50% below its peak in December. A launch attempt by SpaceX, Mr Musk’s rocket company, ended with the Starship rocket exploding—the second such failure in a row. But there was a silver lining: SpaceX forged deals with Airtel and Jio, two telecoms firms, to run its satellite-internet service in India.
Rheinmetall, a German armsmaker whose share price has doubled since November, reported its financial results for 2024. Its operating profit was €1.5bn, a new record and 61% higher than that for the previous year. The company made €10bn-worth of sales, around 30% of which were to the German Bundeswehr. Business will probably continue to boom as Europe rearms and Germany plans to relax its restrictions on borrowing for defence. Rheinmetall expects sales to grow by as much as 30% this year.
Intel appointed Lip-Bu Tan as its new chief executive, replacing Pat Gelsinger, who left abruptly in December. Mr Tan himself had quit Intel’s board in August. He faces a battle to rejuvenate the struggling chipmaker, which has laid off thousands of employees and seen its share price plummet.