Closing summary
European shares are rallying while Wall Street dipped, as investors were cheered by news that European leaders are drafting a Ukraine peace plan to present to the United States.
The German market jumped by 3% earlier and is now 2.4% ahead while the French and Italian markets have gained more than 1%.
The FTSE 100 index has hit a new record high, rallying by 1.1% to 8809.74, led by the defence and aerospace company BAE Systems which jumped by 14.5%. Across Europe, defence stocks rallied, with Germany’s Rheinmetall, Italy’s Leonardo and France’s Thales all gaining between 14% and 17% on the prospect of a splurge in defence spending.
The moves continued a steep rally in defence stocks as investors expected big increases in defence budgets by European countries, stoked by fears that Washington would withdraw security guarantees.
The euro jumped by 1.1% to $1.0491 while the pound rose by 0.9% to $1.26393.
There was also some relief about US tariffs – the US commerce secretary, Howard Lutnick, said on Sunday that new levies on Canada and Mexico will go into effect on Tuesday, but the president will determine whether to stick with the planned 25% level.
“That is a fluid situation,” Lutnick told the Fox News program Sunday Morning Futures.
“There are going to be tariffs on Tuesday on Mexico and Canada. Exactly what they are, we’re going to leave that for the president and his team to negotiate.”
Thank you for reading. We’ll be back tomorrow. Bye! - JK
US manufacturing expands but orders decline – ISM
The US manufacturing sector expanded for the second month in a row in February after more than two years of contraction, according to a closely watched survey.
The manufacturing purchasing managers’ index from the The Institute for Supply Management dipped to 50.3 in February from 50.9 in Janaury, but stayed above the 50 market that divides growth from contraction.
The production index fell to 50.7 from 52.5, still pointing to expansion, but at a slower rate.
The new orders index dropped back into contraction territory though, after expanding for three months, falling to 48.6 from 55.1 in January. Companies continue to lay staff off with the employment index falling further into negative territory, to 47.6.
Timothy Fiore, the institute’s chair, said:
Demand eased, production stabilised, and destaffing continued as panelists’ companies experience the first operational shock of the new administration’s tariff policy. Prices growth accelerated due to tariffs, causing new order placement backlogs, supplier delivery stoppages and manufacturing inventory impacts. Although tariffs do not go into force until mid-March, spot commodity prices have already risen about 20%.
The #ISMPMI Employment Index was in contraction territory for the 27th time in 34 months in February, down 2.7 points to 47.6%. #Manufacturing companies continued to right-size staffs by releasing workers amid growing business uncertainty. https://t.co/G5mZqx2dOG #ISMPMI #economy
— Institute for Supply Management (@ism) March 3, 2025
.@ISM’s Tim Fiore: Companies experienced “the first operational shock of the new administration’s tariff policy. … Although #tariffs do not go into force until mid-March, spot commodity prices have already risen about 20%.” https://t.co/G5mZqx2dOG #ISMPMI #economy #inflation
— Institute for Supply Management (@ism) March 3, 2025
.@ISM® Report On Business®: New orders and #employment contracted, but U.S. factories had enough juice in February to keep the #Manufacturing PMI® (50.3%) in expansion for a second straight month. #Tariffs dominated panelists’ comments. https://t.co/G5mZqx2dOG #ISMPMI #economy
— Institute for Supply Management (@ism) March 3, 2025
