Tariff Uncertainty Roils Markets as Oil Rallies on Demand Outlook

Risk sentiment deteriorated across global markets as the Trump administration's threatened tariffs on China sparked a broad selloff in equities and cryptocurrencies. Bitcoin slipped below $95,000 as investors fled riskier assets, while Asian stock indices declined sharply on concerns that trade barriers could dampen economic growth. The tariff uncertainty has created a challenging macro environment that analysts describe as murky, weighing on sentiment across multiple asset classes.

Oil prices, however, bucked the broader risk-off trend, supported by structural demand expectations that could drive significant consumption growth in coming years. Mexico's ability to reduce government support for its state oil company reflects stronger pricing power, while OPEC's projections for demand expansion suggest the energy market is pricing in longer-term growth despite near-term economic headwinds. Energy demand from artificial intelligence infrastructure and developing economies continues to underpin the commodity's resilience.

The divergence highlights how different markets are responding to competing forces: financial assets are reacting to immediate policy uncertainty and tightening monetary conditions, while commodities tied to long-term demand fundamentals remain supported. Currency markets have stabilized as investors await clarity from upcoming central bank meetings, though the dollar has firmed on elevated U.S. inflation data.