U.S. stock futures opened the week with a notable decline, driven by heightened caution among investors in response to conflicting statements from the U.S. administration regarding upcoming tariff measures. Although July is historically one of the stronger months for equity markets, growing uncertainty around trade policy, coupled with the upcoming release of inflation data and second-quarter earnings, has significantly weakened any sustainable buying momentum.
President Trump announced that formal letters outlining the new tariffs would be sent to a number of trade partners, setting July 9 as the deadline for disclosure. However, there remains a lack of clarity regarding the actual implementation date. Talk of potential tariff increases reaching up to 70% has heightened investor anxiety and reinforced the volatility that has characterized markets since the start of the year. Meanwhile, Trump escalated his rhetoric toward BRICS countries, threatening further tariffs, and also engaged in a political spat with Elon Musk following Musk’s announcement of plans to form a new political party adding a domestic political layer to the already tense global trade landscape.
The expiration of the 90 day tariff moratorium on July 9 places internationally exposed sectors under direct pressure. From a technical perspective, key indices in areas like basic materials and transportation have begun to lose momentum, signaling investor hesitation in taking decisive positions. The uncertainty surrounding both the timing and scale of the tariffs is complicating operational planning for companies, particularly those dependent on global supply chains.
Markets are also closely watching the upcoming release of the Federal Reserve’s June meeting minutes, which come at a critical juncture. Traders are seeking any signals on potential interest rate cuts later this year, especially following recent remarks from Fed Chair Jerome Powell hinting at a possible shift. Technically, the Dollar Index is showing signs of being overbought, increasing the probability of a short-term correction that could benefit commodities such as gold and oil particularly if the dollar weakens against major currencies.
The dollar began the week with a modest rise, supported by a delicate balance between investor caution and technical demand, holding above the 96.50 support level. Market participants await the White House’s final stance on tariffs, which will likely determine the near-term direction of the greenback, especially given the sizable short positioning in the currency.
The dollar climbed against the yen to 145.18 amid a continued lack of progress in trade discussions between Tokyo and Washington. Technically, a break above the 146.00 threshold could lead to a retest of this year’s highs. Meanwhile, the Chinese yuan remained stable within a narrow range of 7.15–7.20, with Chinese authorities executing calculated interventions to preserve currency stability amid a complex mix of trade and financial headwinds.
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