US markets grapple with tariffs as bullish trends emerge
Tensions escalated with Trump's announcement of a 50 per cent tariff on Brazilian imports and copper, effective Aug 1. The move, linked to political disputes involving his ally, former president Jair Bolsonaro, drew a strong response from Brazil's current President Luiz Inacio Lula da Silva and heightened concerns of a potential trade conflict.
Economic data highlighted resilience, with initial jobless claims falling below expectations to 227,000 last week. However, minutes from the Federal Reserve's (Fed) June meeting revealed a cautious stance, with few policymakers supporting an immediate rate cut due to inflation concerns tied to new tariffs.
Despite this, Trump pushed for rate reductions on Thursday via Truth Social, citing tech and industrial stock gains, a cryptocurrency surge, and tariff revenue, claiming economic strength, yet the Fed's wait-and-see approach suggests uncertainty as the week draws to a close.
Market outlook and technical analysis
My analysis points to a bullish outlook for the US markets as of Jul 11, driven by converging business, sentiment, and structural cycles. The economy shows mid-to-late growth with strong earnings and no clear signs of recession. Investor sentiment is turning positive without reaching excessive levels, while low volatility mirrors conditions seen during the 1990s digital boom.
I anticipate a summer rally, fuelled by advances in AI, banking and commodities. Investors are encouraged to follow this momentum, as declining inflation and potential Fed easing could lift valuations, though external shocks might trigger a correction, suggesting a focus on price trends heading into late 2025.
The Nasdaq 100 Index confirms a robust medium-to-long-term uptrend, as it has reclaimed its ascending channel since May 2025, reflecting sustained buyer interest at progressively higher levels and signalling a positive market trajectory. The index faces immediate resistance between 24,000 and 24,500, aligning with the upper boundary of this channel, while support resides near 22,200, offering a critical buffer against downturns. With momentum indicators reinforcing this bullish structure, the Nasdaq 100 is assessed as technically positive for the medium-to-long term.
The writer is equities specialist at Phillip Securities Research
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