Tariff headlines and moving deadlines
Making sense of the forces driving global markets
By Alden Bentley, Editor in Charge, Americas Finance and Markets
Jamie is enjoying some well-deserved time off, but the Reuters markets team will still keep you up to date on what moved markets today and we'll take a close look at how markets are digesting the latest U.S. tariff headlines and how they reacted to Tesla CEO Elon Musk's move to reclaim political influence. I'd love to hear from you so please feel free to reach out at Alden.Bentley@thomsonreuters.com
* US stocks fell on nervousness about Wednesday's tariff deadline, while Tesla tumbled after Elon Musk unveiled a new political party
* Treasury yields rose as trade talks dragged on and investors prepared for auctions this week
* Crude oil prices rose despite OPEC plan to increase supply in August
* Gold weakened on the back of the firmer dollar
US signals trade announcements imminent as deadline looms
Tesla slides as Musk's 'America Party' heightens investor worries
Tesla short sellers set to pocket about $1.4 billion in profits after stock slump
Trump says will impose 25% tariffs on Japan, South Korea
Tariff headlines and moving deadlines
Wall Street paused its bull run to start Monday on the back foot bracing for a barrage of tariff headlines before Wednesday, which U.S. President Donald Trump set as the expiration of a postponement he declared in the wake of the April 2 "Liberation Day" meltdown.
While last week's record highs for the S&P 500 and Nasdaq suggest that markets are learning to take the White House's fluid trade tactics in stride, they did pull back even more at midday after Trump said that from August 1 he will impose 25% tariffs on Japan and South Korea, two of the U.S.'s most stalwart trade allies who have yet to reach trade deals with Trump. Trump has promised to notify countries that haven't reached deals by the July 9 deadline of what their new tariffs will be as of August 1, which now becomes the next big calendar notation for investors. Treasury Secretary Scott Bessent said more trade announcements were likely by Wednesday.
Monday's pullback aside, the stock market has more than recovered from the April panic, riding out numerous other potential major risks, from Trump's threats to fire Fed Chair Jerome Powell, to the U.S. bombing of Iran nuclear sites to last week's passage of the "Big Beautiful Bill" that economists predict will add trillions to the U.S. debt, any tariff revenue notwithstanding. Only the dollar remains deep underwater. Although it bounced nicely on Monday, it is off 7% against the euro since April 2, and the broader dollar index is down about 6%, while the S&P 500 is up 9.5%. The 10-year Treasury note's benchmark yield is only about 20 basis points higher than its April 2 close, having weathered global concern that the U.S. was no longer a safe place to be invested.
Speaking of the "big beautiful" tax bill, Tesla CEO and former-Trump-ally- turned enemy Elon Musk declared it would bankrupt America and announced the formation of a third U.S. political party, the America Party. Investors immediately tanked Tesla shares, which also weighed on Wall Street, recalling how his stint running Trump's Department of Government Efficiency was a costly distraction from the business of making electric vehicles and rockets.
What could move markets tomorrow?
* No major U.S. data, Fed speakers or other events Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias. Trading Day is also sent by email every weekday morning. Think your friend or colleague should know about us? Forward this newsletter to them. They can also sign up here.
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Live Events (You can now subscribe to our (You can now subscribe to our ETMarkets WhatsApp channel "But getting some reasonable framework is clearly going to be a relief for the Indian market because unpredictability is worse than predictability even if the predictability means a little more tariffs and frankly India opening up its economy in some sectors which it may not have been willing to otherwise is long-term very good for the Indian economy 's health in terms of making it more competitive and more open," says Arvind Sanger Well, clearly, the US markets were off a little bit today because of this news about new round of tariffs or reinstatement of the old tariffs in some countries. Luckily, there is time till August one, so the markets did not fall too badly. They fell a little bit 70 bps, 70 basis points in the US S&P from an Indian market standpoint, it is good news. It is now the second or third time in the last few days that President Trump has tweeted that a deal with India is closed. So, hopefully, there is some common ground quickly found and India becomes… There has been a couple of countries that have signed these are all not very detailed but broad outlines. UK has signed one a few weeks ago and then last week, I think, it was Vietnam that signed a deal and now India seems to be lining up and I will be good. It will remove some of the uncertainty, but the reality is with President Trump nothing seems to be permanent and even if India signs a deal now who knows what might come up in the getting some reasonable framework is clearly going to be a relief for the Indian market because unpredictability is worse than predictability even if the predictability means a little more tariffs and frankly India opening up its economy in some sectors which it may not have been willing to otherwise is long-term very good for the Indian economy's health in terms of making it more competitive and more I mean, there is no question in my mind that President Trump does not want the kind of tariff turmoil that we saw after the April 2nd, it was announcement. So, clearly, there is no desire to have that kind of uncertainty and market turmoil and economic what President Trump is doing is trying to put some numbers out there to as they say focus the mind of some of these countries like Korea and Japan to name the two most prominent ones, of the ones named in today's set of new tariffs announced and so if that helps focus the minds of both sides to try to get a deal, there is some my sense is what President Trump and his team are realising is that it is easy to announce these big negotiations, but these negotiations are tough and there is a reason why trade talks take years. And these guys are trying to compress it in weeks. So, I would not count on August one as the last final chance. Maybe it is, but maybe it is far, as we have discovered from the taco kind of name that Trump has been given, I do not think he is interested in causing huge economic turmoil. Short-term a little bit is okay, but he is now looking for assuming that there are deals coming from India and maybe EU and maybe a couple of other countries, then the US markets should settle down and not be too unsettled. But if these promised deals keep getting pushed and pushed to the right and the fear grows that who knows what is coming, then the markets could remain hope and assumption is that India and maybe EU are on track to do deals in the near future in the next few days, hopefully by the end of the week. And if that happens, then to be more specific about the Indian markets should do focus really tariffs is in my opinion a sideshow once we get whatever the tariffs are, some deal on the table, the real issue for the Indian markets is going to be the monsoons are fine, but the economic fundamentals whether it is auto sales growth or other short duration factors that we look at, the data is not extremely encouraging in terms of a strong earnings quarter ahead of I think that the earnings will and the commentary from the corporates will be determining more importantly in my opinion as to what Indian markets do in the coming weeks rather than the tariff news.
