US markets slide on tariff concerns
US equities retreated from record levels after President Trump announced 30% tariffs on imports from Europe and Mexico, effective August 1. The S&P 500 declined 0.3%, the Nasdaq fell 0.2%, and the Dow Jones lost 0.6%, with financial and industrial sectors leading the decline.
Market signals reflect inflation fears
A steepening US yield curve and rising Treasury yields indicated market anxiety over the inflationary effects of the new tariffs. Meanwhile, the US dollar appreciated modestly on a trade-weighted basis, reflecting rising safe-haven demand.
Focus shifts to earnings and policy
With trade risks in focus, investors are closely watching upcoming earnings reports and the Federal Reserve’s policy outlook.
Slowing growth expectations
Markets are turning attention to the second-quarter earnings season, with major US banks such as JPMorgan and Goldman Sachs set to report this week. Analysts forecast slower earnings growth compared to earlier in the year, citing elevated cost pressures and tariff-related disruptions.
Monetary policy in focus
Investors are evaluating whether the Federal Reserve will respond to rising inflation and slowing growth with policy easing or fiscal support. Uncertainty also increased after comments about the possible dismissal of Fed Chair Jerome Powell, raising concerns about central bank independence and continuity.
Global market overview
Outside the US, global markets responded to trade developments and local economic data with mixed performance across regions.
Asia-Pacific markets show mixed performance
Markets across Asia moved cautiously as investors digested the impact of fresh US tariff threats.
- China: The Shanghai Composite rose 0.4%, buoyed by strong June trade data. Exports increased 5.8% year-over-year, supported by earlier US tariff reductions, while imports edged up 1.1%. The trade surplus hit $114.77 billion. Investors are now awaiting Tuesday’s Q2 GDP report, which is expected to exceed Beijing’s 5% annual growth target.
- Singapore: Gained 0.4% after upbeat GDP figures.
- South Korea: The KOSPI posted modest gains.
- Japan: The Nikkei slipped 0.3% amid continued trade concerns.
- Australia: Finished flat as commodity markets delivered mixed signals.
European markets end the week lower
European equities fell sharply on Friday, dragged down by worries about shrinking global trade flows and looming US tariffs.
- The STOXX 50 and STOXX 600 both lost 1.1%, with major names like LVMH, Kering, and Stellantis falling nearly 4%.
- Financial stocks such as UniCredit, BBVA, and Nordea also dropped more than 2%.
- Despite the decline, the STOXX 50 finished the week up 1.7%, and the STOXX 600 ended 1% higher.
Currency and Commodity
Markets reacted defensively in currencies and commodities, reflecting a cautious global outlook and heightened geopolitical risks.
US Dollar holds firm
The US dollar held near 97.8 on Monday, supported by growing trade tensions and investor caution ahead of inflation data. The euro edged down to 1.1677 as the EU considered its next steps. The EU extended its suspension of countermeasures to the new US tariffs until early August, favoring a negotiated outcome. However, officials warned of potential retaliation, with Germany highlighting risks to its export-driven economy.
Oil and metals
Oil prices rose modestly, adding to Friday’s gains, as markets assessed the likelihood of new US sanctions on Russia and the EU’s efforts to cap Russian oil prices. The upside was tempered by Saudi Arabia’s increased output, which surpassed OPEC+ targets, and lingering trade concerns. China’s oil imports reached near-yearly highs, though high inventories may constrain future gains. Precious metals moved higher, reflecting rising safe-haven demand.
Crypto markets surge as Bitcoin hits record high
Cryptocurrencies rallied as bullish sentiment returned on institutional inflows and favorable regulatory developments.
Bitcoin surged past $121,000 in Asian trading, setting a new record. The rally was driven by:
- Strong ETF inflows
- A shift in policy by Chinese regulators
- Increased exposure by firms like Metaplanet
- Growing anticipation of regulatory developments during the upcoming US “Crypto Week” in Washington
Crypto equities also gained, extending the bullish momentum across the sector.
Equities on the move
The following companies experienced notable share price movements due to strategic shifts, analyst outlooks, or market-moving news.
- Kraft Heinz: The company is evaluating a potential $20 billion spin-off of its grocery segment, including iconic Kraft products, in response to evolving consumer preferences and inflationary pressures. This follows Kellogg’s recent $3.1 billion acquisition, underscoring broader industry trends.
- Paypal & Block: Shares fell after reports surfaced that JPMorgan plans to charge fintech firms for access to customer data, potentially generating hundreds of millions in fees. The move hinges on regulatory decisions from the Biden administration. JPMorgan cited security investments and ongoing industry discussions.
- Meta (Facebook): Piper Sandler reaffirmed Meta as its top large-cap internet pick, forecasting Q3 revenue of $47 billion, a 16% year-over-year gain supported by robust digital ad growth, new WhatsApp ad placements, and advertiser demand driven by lower CPMs.
- Amazon: Morgan Stanley raised its price target on Amazon to $300, citing AWS momentum and a supportive macro backdrop. The bank boosted 2026–2027 EPS forecasts by up to 9%, projecting annual AWS growth of 17–18%. The bull case target is $350, driven by AI and e-commerce tailwinds.
- Freeport-McMoRan: UBS downgraded the copper miner to Neutral from Buy, even while raising the price target to $50. The firm cited inventory build-ups and softening demand as headwinds, despite strong operations and gold exposure.
- Super Micro Computer: Citi increased its target price from $37 to $52, driven by accelerating demand for AI servers and Nvidia platform adoption. Despite maintaining a Neutral rating, Citi flagged risks from rising competition (e.g., Dell, HPE), tariffs, and platform transitions.
- Roblox: Citi upgraded its price target from $100 to $123 after a 55% rally since Q1. The bullish view was backed by strong Q2 user metrics, higher-than-expected bookings and EBITDA, and a favorable US court ruling on Apple and Google App Store fees.
- UBS European Equity Outlook: UBS raised its conviction in European equities heading into Q2 results, citing potential positive surprises from company fundamentals. While macro conditions remain fragile and 2025 forecasts were revised down, the firm sees earnings resuming in 2026, led by cyclical sectors. UBS identified 21 companies with outperformance potential amid cautious sentiment.
Key economic data and events to watch
This week, macro data and trade policy developments are set to drive market direction.
Markets are focused on:
- Ongoing US trade policy changes
- US CPI inflation and retail sales reports
- Q2 earnings from key financial institutions
- Major economic releases from the UK, Euro Area, and China, including inflation, trade, and GDP figures
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