Markets Turn Cautious Amid Escalating Tariff Measures and Geopolitical Tensions

Index Update:  President Trump imposed 15% global tariffs under Section 122 following the Supreme Court’s rejection of earlier trade measures, creating uncertainty around their interaction with existing trade agreements and potential congressional approval. Meanwhile, Gilead declined 1.5% after announcing a $7.8 billion acquisition of Arcellx, Nvidia edged lower ahead of earnings, and asset managers with private credit exposure extended losses after Blue Owl restricted fund redemptions.

Market Movers:  On Friday, the top gainers were Abits Group Inc (+86.49%), followed by RingCentral, Inc. (+34.40%). On the contrary, GRAIL, Inc. (-50.55%), and WeShop Holdings Limited (-45.05%) declined the most the same day.

Commodities Update:  Oil prices hovered near six-month highs on Monday, with WTI around USD 66.5 per barrel and Brent near USD 72, as markets assessed the prospects of a US–Iran nuclear agreement and the potential impact on supply. While renewed diplomatic talks in Geneva and reports of limited military strike scenarios eased fears of major supply disruptions, concerns persisted over possible traffic risks through the Strait of Hormuz. At the same time, President Trump’s decision to raise global tariffs to 15% following the Supreme Court’s rejection of earlier measures added fresh uncertainty to the global demand outlook. Precious metals advanced sharply amid heightened geopolitical and trade tensions. Gold climbed 1% to a three-week high near USD 5,160 per ounce, while silver gained nearly 3%, extending its rally as investors sought safe-haven assets. Escalating tariff disputes involving the US, Europe, and India, alongside lingering fears of potential US military action against Iran, supported demand for metals, with trading activity expected to increase as Chinese markets reopen after a holiday.

Macro Updates;  Trump Invokes Trade Act to Reinstate Temporary Global Tariffs After Supreme Court Setback

After the Supreme Court struck down his emergency tariffs, President Trump invoked Section 122 of the 1974 Trade Act to impose temporary 15% global tariffs for up to 150 days, with the possibility of renewal by Congress or reissuance through a new emergency declaration, effectively allowing extended use of the measure. Meanwhile, U.S. Customs said it will stop collecting the invalidated tariffs from Tuesday, though questions remain over ongoing collections and potential refunds for importers.

Dollar Slips as Trade Policy Uncertainty Weighs on Sentiment

The dollar index fell below 97.5 as renewed uncertainty over US trade policy pressured the currency after President Trump announced plans to raise global tariffs to 15% following a Supreme Court ruling against his earlier measures. While US officials said existing trade agreements would remain intact, concerns over strained negotiations with Europe and India and broader policy unpredictability dampened investor confidence, prompting foreign investors to reduce exposure to US assets.

Bonds Commentary:  The US 10-year Treasury yield eased to around 4.07% as renewed trade policy uncertainty increased demand for safe-haven assets after President Trump raised global tariffs to 15% following a Supreme Court ruling against his prior measures. While officials indicated existing trade deals would remain intact, concerns over potential disruptions weighed on sentiment, with investors also watching upcoming durable goods and factory orders data for economic signals.

Futures Update:  U.S. stock futures moved lower on Monday after President Trump announced temporary 15% broad-based tariffs following a Supreme Court ruling against his prior emergency levies, with Dow, S&P 500, and Nasdaq 100 futures declining between 0.5% and 0.7% in early trading.

After an initial decline, stocks experienced fluctuations throughout the trading session but largely maintained a positive bias, eventually closing the day mostly higher. All major averages finished in positive territory, with the tech-heavy Nasdaq seeing notable gains. The S&P 500 rose by 73.34 points, or 1.07%, closing at 6,909.52. From a technical perspective, the index has regained its key moving averages, with the current price hovering near immediate resistance levels that could limit further upward movement. Meanwhile, the 14-day Relative Strength Index (RSI) remains around the midpoint, indicating neutral sentiment. Immediate support is seen around 6,760, which could serve as a potential bounce zone, while resistance is located near 6,977.