Last week, the international markets experienced notable fluctuations, prompted largely by ongoing concerns over tariffs that continued to unsettle investors. The tremors from tariff worries are echoing far and wide, impacting not just American markets but casting shadows on global economic outlooks.

In the United States, stock markets did not fare well, with all major indices witnessing declines. The Dow Jones Industrial Average dropped 2.51% over the week, mirroring the decline in the Nasdaq and marking a significant downturn across the board. The S&P 500, another critical benchmark, also showed a weekly decline of 1.66%. In Europe, the trend wasn't any brighter, as the continent's three major stock indices also faced modest drops: the FTSE 100 in the UK fell by 0.84%, the DAX 30 in Germany by 1.00%, and France's CAC 40 by 0.29%.

This week promises a wealth of insights, as the United States prepares to release pivotal data including the personal consumption expenditures (PCE) price index and gross domestic product (GDP). Such data might crucially influence the anticipated paths of interest rate cuts. Furthermore, any updates concerning the U.S. government's tariff plans represent potential risk factors that could sway market confidence.

The question hovering over the American economy is whether inflationary pressures can be alleviated. Recently, the U.S. government announced the imposition of a 25% tariff on imports of vehicles, pharmaceuticals, and semiconductors, escalating the uncertainty surrounding global economic prospects. Investors are on high alert, waiting for more revelations on trade tariffs in the upcoming week.

The January minutes from the Federal Reserve’s meeting reiterated officials' concerns about the potential inflation impacts stemming from U.S. policy changes. These concerns manifest in a hesitance among officials regarding rate cuts, as indicated by current interest rate pricing that still does not fully anticipate two cuts within the year. Over the coming week, several Federal Reserve officials are expected to deliver routine speeches, which should provide additional context regarding economic conditions and monetary policy direction.

On the data front, the forthcoming revision of the GDP figures for the fourth quarter of last year is predicted to echo the slowdown indicated in preliminary readings, with an expected annualized growth rate of just 2.3%, down from 3.1% in the previous quarter. While the economic slowdown is more pronounced than anticipated, major contributing factors include the impact of hurricanes and Boeing's strike actions. However, when observing household consumption, growth appears resilient, escalating from 3.7% to 4.1%. This suggests that American consumers are exhibiting notable elasticity amidst the economic headwinds. Forecasts for 2025 indicate a further reduction in GDP growth pace to around 2%, hinting at a persistent limitation on spending arising from inflationary pressures.

The PCE serves as the Federal Reserve’s preferred inflation measure, with core inflation expected to remain around 2.8% in February. Analysts emphasize the need to closely monitor personal income and expenditure levels for signs of consumer price stress. Additionally, attention is drawn to the Conference Board's Consumer Confidence Index for February, January's durable goods data, weekly jobless claims, the Case-Shiller Home Price Index, and new home sales data from January.

In the realm of earnings reports, notable names such as Nvidia, Safeway, Snowflake, and prominent retailers like Home Depot and Lowe's will take center stage this week, potentially offering insights into market dynamics.

Looking at the commodities market, oil prices experienced narrow fluctuations as the market evaluates global supply and demand forecasts. The near-term WTI crude oil contract dropped by 0.44% for the week to settle at $70.40 per barrel, while Brent crude similarly fell by 0.41% to $74.43 per barrel.

Investors are grappling with a decrease in the risk premium associated with Middle Eastern tensions. Reports from the U.S. Energy Information Administration highlighted an uptick in domestic crude inventories due to seasonal refinery maintenance that has curbed processing volumes. In another report, Baker Hughes noted that U.S. energy firms had added oil and gas drilling rigs for the fourth consecutive week, reaching the highest number since June of the previous year.

A report from Commerzbank's commodity strategist read that the current trading range for oil is indicative of many unresolved decisions that could push prices in either direction—such as the potential delay of planned production increases by OPEC+ slated for April, balanced against the U.S. government’s ambition to swiftly rebuild its strategic reserves.

International gold prices have risen for the eighth consecutive week, driven by sustained investor demand for safe havens amid tariff uncertainties. Gold futures for February delivery on the COMEX surged by 1.87%, reaching $2937.60 per ounce—hovering just shy of the psychological barrier of $3000 per ounce.

According to commodity strategy chief at Saxo Bank, Hansen, “Unless international gold prices fall to around $2850, the uninterrupted rise since last December remains largely unchallenged.” The previous week saw gold prices breaking through two historical highs, as uncertainties surrounding global economic growth and political instability intensified demand for this precious metal.

Gold continues to assert its resilience as a preferred hedge against increasing trade uncertainties. As U.S. policies are perceived to elevate inflation risks, market participants remain on the lookout for indications regarding the Federal Reserve's interest rate trajectory. Sharply rising inflation could potentially compel the Fed to maintain elevated rates, which, in turn, would dampen gold’s allure.

Across the Atlantic, the European Central Bank made another cut in January, with continued monetary easing being close to halting since market rates are currently significantly lower than its peers. ECB Governing Council member Schnabel highlighted the relatively low inflation rates in the Eurozone—tracking at a consumer price index of 2.4% and core inflation at 2.7%. The upcoming week will showcase the release of the latest inflation data for the Eurozone.

Since mid-last year, the ECB has implemented five rate cuts, aiming to stimulate Europe’s two largest economies. Yet, Germany's manufacturing sector continues to dwell in the doldrums, hindering significant growth. On the flip side, France has shown a slightly better performance, largely credited to its service sector, buoyed in part by benefits derived from the Olympics last summer. Market projections anticipate a continuation of lackluster economic performance in Germany for Q4 of last year, while France is expected to report a mild recovery of 0.1% in Q4, led by improvements in the service sector.

The latest figures from the UK’s Office for National Statistics revealed that average wages, excluding bonuses, rose by 5.9% year-on-year in December, eclipsing the previous increase of 5.6%. The ILO unemployment rate remained stable at 4.4% while the number of employed individuals saw an increase of 21,000. In parallel, the consumer price index for January in the UK surged from 2.5% in December to 3%. This new data could encourage a more cautious approach from Bank of England officials as they seek to balance robust wage and price pressures against sluggish economic growth and signs of layoffs. BoE governor Bailey attributed persistent inflation in service sectors to wage growth, though labor market pressures might begin to ease following the Labour Party's initial Budget which increased employment costs.