The yen was trading around 154 per dollar, after rising on the greenback over the past two sessions amid speculation that the US could coordinate intervention with Japan. A gauge of the dollar was steady on Tuesday, hovering around levels last seen in 2022. Gold and silver also traded near their record highs on Tuesday.While much of the market’s focus has been on currencies and the risk of yen intervention, tariff concerns have also resurfaced after Trump warned of 100% tariffs on Canada. The added uncertainty comes in a pivotal week for investors, with megacap tech gains set to test whether the AI-powered rally can be sustained.
“Technology has become more of a show-me story,” said Darrell Cronk, chief investment officer for wealth and investment management at Wells Fargo, which manages $2.3 trillion. “If Big Tech can continue to deliver, I think capital will start flowing back into technology.”
In the US this week, companies account for roughly a third of the S&P 500’s market capitalization.
The US president has ratcheted up trade tensions with several allies in recent weeks, threatening to raise tariffs on Canadian products to 100% if Ottawa signs a trade deal with China. Trump attributed a 25% tariff increase on South Korean goods to the country’s legislature’s failure to codify a trade deal struck last year with the US. Trump had previously threatened to file new charges against European countries’ goods over his quest to seize control of Greenland. Then he withdrew.
Meanwhile, a rise in the yen remained in focus after comments from Japanese officials fueled speculation that the government could intervene in the market to prevent the currency from falling again. For some, however, the recent rally has partially neutralized the likelihood of intervention.
“The yen’s dramatic recovery suggests that real action is not necessary,” said Marc Chandler of Bannockburn Capital Markets.
Elsewhere, U.S. power grids are under increasing pressure from a winter storm that has brought deep cold, heavy snow and ice from Texas to Maine. This took an estimated 12% of U.S. natural gas production offline and forecasts for frigid weather sent prices soaring.
US natural gas prices rose by about 30%.
Treasury yields remained within a narrow range on Monday, with the Federal Reserve expected to pause its interest rate cuts when it announces its policy on Wednesday.
Fed officials are expected to keep rates steady after three straight cuts in late 2025, as a more stable labor market restores consensus at the central bank after months of growing divisions. Chairman Jerome Powell will likely telegraph his view that policy is well positioned for now, but will refrain from providing much information about where rates are headed.
Expectations about Fed policy have shifted in response to changes in the consensus view of who Trump will nominate to succeed Powell, whose term ends in May.
“While the Fed is not expected to cut rates, Powell’s press conference may be as much about Fed independence as it is about policy,” said Chris Larkin of Morgan Stanley’s E*Trade.
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