TRADING DAY-Trump tariff chaos hits US stocks hardest

By Jamie McGeever

ORLANDO, Florida, Feb 23 (Reuters) - Wall Street fell sharply on Monday as renewed global tariff uncertainty and rumbling software-fueled AI fears slammed shares and steered investors to the traditional safe-haven harbors of gold, Treasuries and the Swiss franc.

In my column today, I look at how the disinflationary drag from oil prices is evaporating. As oil rises, the year-on-year price change is poised to turn positive, a potentially unwelcome inflationary impulse for policymakers to consider.

If you have more time to read, here are a few articles I recommend to help you make sense of what happened in markets today.

1. U.S. tariff turmoil leaves Treasury markets dazed

2. With U.S. tariff rates up in the air, the economic fog again thickens

3. Winners and losers from Trump's new 15% global tariff

4. Software companies face higher borrowing costs, tougher scrutiny as AI threatens businesses

5. Fed's Waller: January jobs data an upside surprise, if it continues a policy pause may be appropriate

Today's Key Market Moves

• STOCKS: Big U.S. indices in the red. South Korea, MSCI Asia ex-Japan hit new highs. Hong Kong +2.5%, but China -1.3%.

• SECTORS/SHARES: Surprisingly, six S&P 500 sectors rise, led by healthcare and consumer staples. But the other five lose at least 1%; financials -3%, biggest fall since April. IBM -13%, KKR -9%.

• FX: Mexican peso -1%, biggest decliner on the day. Norwegian crown -0.5%. Biggest gainers in G10 FX are safe-havens Swiss franc, Japanese yen. U.S. dollar slips, bitcoin -5% below $64,000.

• BONDS: Treasuries rally, pushing yields down as much as 7 bps at the belly of the curve.

• COMMODITIES/METALS: Oil hits 6-month high but ends lower, gold hits 3-week high above $5,200/oz, silver +5%.

Today's Talking Points

Tariffied and confused

Just when investors, businesses, and consumers thought they had weathered U.S. President Donald Trump's tariff storm, they face a new whirlwind of uncertainty and chaos, after the U.S. Supreme Court ruled that most duties were unlawful, and Trump immediately hit back with a new, temporary, 15% global levy.

What does this mean for federal budget revenues, legal proceedings for tariff refunds, existing and future trade deals, the midterm U.S. elections, inflation, and asset prices? The truth is, no one really knows. Amid so much uncertainty, investors are understandably going on the defensive.

Private credit fears - justified or not?

Jitters continue to spread through the opaque world of private credit, with investors spooked by lenders' exposure to the battered U.S. software sector, liquidity concerns, and alternative asset manager Blue Owl halting redemptions at one of its funds.

Blue Owl shares slid another 3% on Monday, meaning the firm has lost almost a quarter of its value this month. Shares in private credit giants Apollo and KKR slumped 5% and 9% on Monday, respectively. UBS analysts estimate that, in a worst-case scenario, private credit defaults could rise 8% over the next year.

U.S.-RoW divergence widens

As the U.S. software rout deepens - the sector is down 25% this year and has wiped out almost all its post-"Liberation Day" gains from April - the S&P 500 on Monday dipped back into negative territory for the year.

The Nasdaq is down 3% and the Dow is still up 1.5% YTD, but compare the big three U.S. indices with their global peers - Europe's STOXX 600 is up 6%, Britain's FTSE 100 is up 8%, and Japan's Nikkei is up 12%. And look at chipmakers Taiwan and South Korea, where stocks are up 16% and 38%, respectively.

What could move markets tomorrow?

• European Central Bank board members Pedro Machado and Anneli Tuominen speak at separate events

• U.S. house prices (December)

• U.S. Treasury sells $69 billion of two-year notes at auction

• U.S. Federal Reserve officials scheduled to speak include Chicago Fed President Austan Goolsbee, Atlanta Fed President Raphael Bostic, Boston Fed President Susan Collins, Richmond Fed President Thomas Barkin, Governors Lisa Cook and Christopher Waller

• U.S. President Donald Trump delivers State of the Union address (after U.S. markets close)

Want to receive Trading Day in your inbox every weekday morning? Sign up for my newsletter here.

Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.