Wall Street Week Ahead: Investors eye tariff deadline as US stocks rally
(You can now subscribe to our
(You can now subscribe to our ETMarkets WhatsApp channel
Investors will be keeping a close eye on tariff headlines out of Washington next week, as a temporary suspension of punitive import levies is set to expire. If that Wednesday deadline passes without an increase in trade tensions , it could prove positive for the markets. Negotiators from more than a dozen major U.S. trading partners are rushing to reach agreements with U.S. President Donald Trump's administration by July 9 to avoid even higher tariffs, and Trump and his team have kept up the pressure in recent days.On Wednesday, Trump announced a deal with Vietnam that he says will impose a lower-than-promised 20% tariff on many Vietnamese exports. While the administration has teased a forthcoming deal with India, talks with Japan, the sixth-largest U.S. trading partner and closest ally in Asia, appeared to hit roadblocks. Investors have shifted from panicking about tariffs to relief buying, recently lifting the U.S. stock market back to record highs, with corporate earnings and the U.S. economy holding up better than many had expected through a period of dramatic policy change.The S&P 500 has risen about 26% from April 8, when stocks bottomed following Trump's draconian April 2 tariff announcement.But much of the rally has been driven by retail market participants and corporate share buybacks , even as institutional investors have been more reticent.Despite the S&P 500 making new highs, equity positioning is far below February levels as investors remain underweight stocks, according to Deutsche Bank estimates."This has definitely been a junkier rally, a more speculative rally," Lisa Shalett, chief investment officer at Morgan Stanley Wealth Management."In the last week or so, it's been driven a lot more, I think, by retail than it has been by institutions. Institutional positioning is really just average," she said. While many factors are keeping investors cautious, including worries about U.S. economic growth and lofty stock market valuations, getting past the tariff deadline without a major escalation in tensions would be one less thing to worry about in the near term, analysts said."I think that there may be some threats and saber-rattling, but I don't really think that any of that now poses a major danger to the market," said Irene Tunkel, chief U.S. equities strategist, BCA Research.Still, investors don't expect the tariff deadline to put an end to trade tensions for good."I don't view it necessarily as a hard deadline," said Julian McManus, portfolio manager at Janus Henderson Investors."The 90-day pause itself was instituted because the markets were falling apart, and I think policymakers needed breathing room and time to try and negotiate these deals or find some kind of off ramp," he said.Investors' cautious approach to boosting equity exposure now is reminiscent of their behavior immediately after the pandemic market drop of March 2020, when allocations to stocks recovered more slowly than major market indexes, Deutsche Bank strategist Parag Thatte, said."It does mean that there is room for exposures to keep rising, which is a positive for equities all else equal," Thatte said.After a roller-coaster first half, the S&P 500 is entering a historically strong period. Over the past 20 years, July has been the strongest month for the benchmark index with an average return of 2.5%, according to a Reuters analysis of LSEG data. Investors will also be keeping an eye on economic data - especially inflation numbers - and second quarter results in coming weeks for clues to the health of the U.S. economy, and the Federal Reserve interest rate outlook."We're right at the point where institutions are going to have to decide one way or the other, do they believe the rally or not," Morgan Stanley's Shalett said.Wall St Week Ahead runs every Friday. For the daily stock market report.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Time of India
34 minutes ago
- Time of India
'President Elon'? Musk launches 'The America Party' after spat with Donald Trump - is it viable?
Elon Musk has done many things few thought possible: Launching rockets, developing self-driving cars, and turning a major social media platform into his personal megaphone. Now, he's taking on his most ambitious project yet: blowing up America's entrenched two-party system. On Sunday, the world's richest man unveiled the launch of the 'America Party' a self-funded political force he claims will challenge what he describes as a corrupt and bankrupt "uniparty" dominated by both Democrats and Republicans. The move formalises weeks of growing hostility between Musk and Trump, transforming a simmering feud into full-blown political warfare. 'Today, the America Party is formed to give you back your freedom,' Musk declared on X, the social media platform he owns. — elonmusk (@elonmusk) Long one of Trump's biggest donors and closest policy allies, Musk now vows to bankroll challengers to Republican incumbents and push forward what he hopes will become the most consequential third-party bid in modern US history. The question now: Is this Musk's next great disruption or a high-profile experiment doomed by the very system he hopes to upend? Musk lashes out Musk's post was one of several attacks on both parties, but especially on Republicans who, in his view, have broken promises to reduce government spending. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Providers are furious: Internet access without a subscription! Techno Mag Learn More Undo 'Every member of Congress who campaigned on reducing government spending and then immediately voted for the biggest debt increase in history should hang their head in shame!' he wrote. 'And they will lose their primary next year if it is the last thing I do on this Earth. ' Musk further accused Congress of representing a corrupt 'Democrat-Republican uniparty,' adding: 'Our country needs an alternative... so that the people actually have a VOICE.' But as the Washington Post's Prompt newsletter noted, many political observers see Musk's crusade as more performative than strategic. While he once led Trump's Department of Government Efficiency, Musk showed little real interest in cutting the national debt until the bill directly threatened his business incentives. Can Musk's 'America Party' succeed? Experts say not likely Jenna Bednar, a political scientist at the University of Michigan, echoed these concerns in an interview with The : 'In the United States' electoral system, third parties face nearly insurmountable organisational, institutional, and cultural barriers… Mr. Musk likes to build big and has ambitions for a national party. I don't see it becoming a serious rival to the two parties.' She added, however, that Musk 'could be enormously successful if he uses his wealth to support primary challengers… He could significantly reshape the Republican Party from within by freeing centrist Republicans from their fears of Mr. Trump.' Bednar also cautioned that 'there is a high likelihood that Mr. Musk's attention would wane; the earliest primaries are not until March 2026. He may move on to other projects long before then. ' Libertarian Party: Musk's cautionary tale As Musk builds the America Party from scratch, many experts point to the Libertarian Party as a cautionary tale. It remains the most consistently successful third party in modern US politics yet its influence remains marginal. Founded in 1971, the Libertarian Party has built robust ballot access, often appearing in all 50 states. It achieved its best-ever presidential performance in 2016, when Gary Johnson won 3.3% of the national vote over 4.4 million ballots. However, that momentum has yet to translate into broader national relevance. The party has found some success in local elections, winning hundreds of municipal offices and occasionally a state legislative seat. But it has never sent a member to Congress elected purely as a Libertarian. Figures like Justin Amash switched affiliation while in office but did not win re-election under the party banner. In short, even with decades of organising, broad ideological appeal, and consistent ballot access, the Libertarian Party has struggled to gain serious political traction. Musk may have resources far beyond any Libertarian candidate in history, but the same systemic barriers legal, financial, and cultural could confine the America Party to the same fate. Third-party struggles CNN highlighted how entrenched the two-party system has become, noting that even well-funded independents like Robert F. Kennedy Jr. or popular outliers like Lisa Murkowski often struggle to survive politically. 'You're roadkill in the middle,' Murkowski told The Assignment podcast. Furthermore, to qualify as a party in California, for instance, a new political group must either register 75,000 voters or gather over 1 million petition signatures. And to be nationally recognised, each state branch must request an advisory opinion from the Federal Election Commission, a time-consuming and expensive process. Despite this, Musk's immense personal wealth could theoretically change the game. Musk spent $277 million in the 2024 cycle, mostly through America PAC, and could do so again. However, even with endless money, Kappel warned: 'The hurdles for creating a new party and getting it on the ballot are extremely high… It's a multi-year project and will cost hundreds of millions of dollars.' Parties that rose, ruled — and vanished Musk's America Party may seem like a moonshot in today's entrenched two-party system, but American history is filled with once-powerful parties that vanished — and others that emerged to take their place. In the early days of the republic, the Federalist Party dominated under Alexander Hamilton, only to fade after the War of 1812. It was replaced by the Whigs, who briefly rose to prominence in the mid-19th century before collapsing over divisions on slavery. Out of the Whigs' ashes came the Republican Party — a fringe movement that, within a few years, swept Abraham Lincoln into the presidency. These historical shifts show that the American party system is not as fixed as it may seem. But the key ingredient for transformation wasn't just money or media power; it was a moment of crisis, a vacuum in political leadership, and deep national realignment. America Party's 2026 plan: Targeted disruption Musk proposed focusing on just a few vulnerable Senate and House races. 'One way to execute on this would be to laser-focus on just 2 or 3 Senate seats and 8 to 10 House districts,' he wrote. 'Crack the uniparty system through extremely concentrated force at a precise location on the battlefield.' Still, legal and structural challenges remain enormous. Musk has yet to register the party with the FEC and will need a legal framework to coordinate donations, meet ballot requirements, and recruit candidates. Former DOGE aide James Fishback has even launched a rival super PAC to counter Musk's influence. Called FSD PAC (Full Support for Donald), it aims to raise $1 million to back Trump-aligned candidates and oppose Musk-backed challengers. For now, Musk's America Party is more of a declaration than institution. But if his wealth, frustration, and ambition hold firm, it could reshape the GOP or become the most serious third-party movement America has seen in decades.
Mint
36 minutes ago
- Mint
Saudis Raise Main Oil Prices for Asia a Day After OPEC Hike
(Bloomberg) -- Saudi Arabia raised prices for its main crude grade for buyers in Asia next month as demand for oil and fuels holds up. The move, a day after OPEC producers agreed to a fourth round of big output hikes, suggests the kingdom is confident about the market. State producer Aramco will raise the price for Arab Light crude, its flagship grade, by $1 a barrel to $2.20 a barrel more than the regional benchmark for Asian customers, according to a price sheet from the company seen by Bloomberg. Three refinery officials in Asia expressed their surprise at the size of the increase. Aramco was expected to raise Arab Light by 65 cents a barrel, according to a survey of traders and refiners. On Saturday, the Saudis on Saturday led the OPEC group, which includes partners like Russia, in agreeing to raise production by 548,000 barrels a day in August, in part to take advantage of strong summer consumption. The increase, faster than traders and analysts foresaw, may contribute to a crude surplus later this year with Wall Street firms such as JPMorgan Chase & Co. and Goldman Sachs Group Inc. anticipating that prices sink near $60 a barrel in the fourth quarter. The OPEC increase puts the group on pace to unwind the layer of voluntary output cuts by eight members by September, which is one year earlier than originally outlined. The countries had announced increases of 411,000 barrels for each of May, June and July — already three times faster than scheduled. Read: OPEC Will Boost Supply Even Faster With Larger August Hike (2) Oil spiked above $80 a barrel last month as Israel exchanged missile barrages with Iran in one of the most dramatic escalations of conflict in the Middle East in recent years. Markets had largely shrugged off prior geopolitical tensions linked to Israel's war in Gaza and attacks on Hezbollah as those conflicts failed to impede the flow of oil. While a wider war involving Iran could put energy production and export infrastructure at risk, Brent crude fell back below $70 a barrel soon after US President Donald Trump announced a ceasefire between Tehran and Jerusalem and limited the US involvement in attacks. Demand for crude and products has largely held up amid summer use with margins for refiners rising. Still, traders see the market softening later this year as consumption wanes and the OPEC increases contribute to a surplus of crude in storage. The Organization of the Petroleum Exporting Countries and its allies are set to bring back to market 2.2 million barrels a day overall this year once it unwinds the voluntary cuts. --With assistance from Alex Longley and Alaric Nightingale. (Updates with industry reaction in third paragraph.) More stories like this are available on
Time of India
38 minutes ago
- Time of India
US close to several trade deals, announcements to be made in next days, Bessent says
U.S. Treasury Secretary Scott Bessent announced that the United States is nearing trade agreements before a July 9 tariff deadline. The Trump administration plans to notify 100 smaller countries about potential tariff increases if progress isn't made. Letters will be sent, warning of a return to April 2 tariff levels on August 1 if deals aren't expedited. Tired of too many ads? Remove Ads The United States is close to reaching agreements on several trade deals ahead of a July 9 deadline when higher tariffs kick in, U.S. Treasury Secretary Scott Bessent said on Sunday, predicting several big announcements in coming told CNN's "State of the Union" program that the Trump administration would also send out letters to 100 smaller countries with whom the U.S. doesn't have much trade, notifying them that they would face higher tariff rates first set on April 2 and then suspended until July 9."President Trump's going to be sending letters to some of our trading partners saying that, if you don't move things along, then on August 1, you will boomerang back to your April 2 tariff level. So I think we're going to see a lot of deals very quickly," Bessent said.
