Global Stocks Rise Ahead of Tariff Talks and U.S. Earnings, Inflation Data
Stocks worldwide rose on Tuesday, supported by tentative optimism ahead of an important week for U.S. corporate earnings and inflation data. MSCI’s broadest index of Asia-Pacific shares outside Japan was up 0.8%, and Europe’s STOXX 600 gained 0.2%. Nasdaq futures rise after Nvidia says it will recommence H20 chip sales to China, boosting the tech mood.
Wall Street’s trading day ended with slight gains. The Dow and S&P 500 added to modest gains, and the Nasdaq increased 0.25%. Investors are thus on tenterhooks about second-quarter earnings; S&P 500 profits are expected to rise 5.8% year-over-year, versus April’s expectation of a 10.2% increase, before Trump’s tariff brinkmanship.
Trump’s Warnings on Tariffs Prompt Global Rebuke
Over the weekend, President Trump indicated that 30% tariffs on EU and Mexican goods could kick in on August 1. However, he also expressed willingness to negotiate. The EU cautioned that retaliatory measures would be taken if no agreement were reached. U.S. Treasury Secretary Scott Bessent is scheduled to meet on Friday in Tokyo with Japan’s Prime Minister Shigeru Ishiba before the U.S. slaps on higher 25% tariffs.
Mexico has not publicly responded, while upcoming elections in Japan could shake domestic politics. Japanese government bonds fell sharply, with the yield on the 10-year note spiking to 1.595 percent, a level not seen since 2008.
Focus on Earnings and Inflation Data
So far, markets are generally treating the tariff threats as background noise unless some tangible action is taken. What matters most to investors right now is the U.S. inflation report. The Consumer Price Index (CPI) for June is expected on Tuesday. Experts believe that Trump’s new tariffs could soon start pushing prices higher.
Meanwhile, Trump has again attacked Federal Reserve Chair Jerome Powell. Analysts say Powell is increasingly feeling political pressure to cut interest rates more aggressively, although the Fed still has said it plans to be patient.
Energy, Metals Circle on Geopolitical Tension
Oil prices fell after Trump gave Russia a 30-day deadline to end the war in Ukraine or face new U.S. energy sanctions. Brent crude dropped 0.6 percent to $66.56 a barrel. Gold rose 0.5 percent to $3,358 an ounce, and silver gained 0.3 percent to $38.25, close to 2011 highs.
The dollar was little changed at 147.62 yen. The euro rose 0.1 percent to $1.1680, snapping a four-day downward trend.
