As February ends, uncertainty is felt throughout the market. The threat of tariffs, surprise developments in AI, an increase in U.S. inflation, and a major shift in U.S. policy concerning Ukraine, among other things, are just a few of the challenges that investors have faced this year. However, global equity markets have remained strong despite these challenges.

Trade and Tariff

Tariffs continue to be on everyone’s mind. Despite many threats, the U.S. government has undertaken one action so far: an additional 10% tax on Chinese imports. The U.S. had pre-existing tariffs on Chinese goods, resulting in a total tariff percentage of 17.5%. Yet, the risk of new tariffs remains; the U.S. is expected to revisit its plans for Mexico and Canada in early March and is planning tariffs on all steel and aluminum products. In response, both Canada and Mexico have threatened retaliatory tariffs, raising concerns about potential disruptions in North American trade and supply chains.

These uncertainties have weighed heavily on the Canadian dollar, which has seen a notable decline against the U.S. dollar throughout February. The weakened currency has also raised concerns about inflation, as imported goods become more expensive for Canadian consumers and increase the cost of living.

Stock market

In the U.S., the S&P 500 and Nasdaq Composite experienced fluctuations driven by uncertainty over tariffs and inflation data. However, strong earnings reports from major technology firms such as Microsoft and Google helped stabilize the market due to advancements in AI such as Google's AI co-scientist system and OpenAI's launching “operator” designed to handle online tasks, including ordering groceries and processing ticket purchases.

The Dow Jones Industrial Average remained relatively flat for most of the month as mixed economic data created uncertainty about future Federal Reserve policy. Inflation numbers released in mid-February showed a slight increase, leading to speculations. In Canada, the TSX Composite Index faced headwinds due to the decline of the Canadian dollar and concerns over new U.S. tariffs.

Crypto-Currency

February 2025 has been a turbulent month for the cryptocurrency market, marked by significant price fluctuations, security breaches, and legal challenges.

Bitcoin (BTC), the leading cryptocurrency, experienced a notable decline. After reaching a peak of $109,000 in January, BTC's value dropped by approximately 23%, falling below the $90,000 threshold. As of February 26, it was trading around $84,201.

A significant event impacting market sentiment was the $1.5 billion hack of the ByBit cryptocurrency exchange. The FBI attributed this breach to North Korean actors, who allegedly converted the stolen assets into Bitcoin and other cryptocurrencies.

In the legal arena, Tether, the operator of the USDT stablecoin, faced a setback when a London High Court judge denied its request to block a lawsuit in California. The case involves allegations of misappropriated trade secrets related to a dissolved Bitcoin mining joint venture between Tether and Swan Bitcoin.

Despite these challenges, global equity markets have shown resilience, meanwhile, the cryptocurrency sector remains turbulent. As we move into March, all eyes will be on inflation trends, central bank policies, geopolitical developments, and trade policies, which will continue to shape the financial markets in the months ahead.