Category: Market News

U.S. equities slipped on Monday as investor sentiment turned cautious amid renewed concerns over escalating trade tariffs proposed by President Donald Trump. Following last week’s record-setting performance, all three major indexes opened lower: the Dow Jones Industrial Average fell 95 points (0.2%), the S&P 500 dropped 22 points (0.4%), and the Nasdaq Composite declined 95 points (0.5%) by 9:32 a.m. ET.

Market participants are increasingly wary as the deadline nears for the expiration of a temporary pause on Trump’s proposed retaliatory tariffs. While preliminary trade pacts have been reached with the U.K., Vietnam, and China, broader agreements remain elusive. Treasury Secretary Scott Bessent indicated that talks have intensified in recent days, saying he received a wave of fresh proposals overnight. “It’s going to be a busy couple of days,” he told CNBC, hinting at a flurry of upcoming trade announcements within 48 hours.

President Trump confirmed that notices outlining new tariff rates would be sent out Monday. However, the timeline for implementation remains unclear, with some reports suggesting the new measures may not take effect until August 1. Trump also suggested the tariffs could be as steep as 60% to 70%, and indicated that nations within the BRICS alliance—Brazil, Russia, India, China, and South Africa—may face additional duties due to what he described as “anti-American conduct.”

Investors are also looking ahead to Wednesday’s release of the Federal Reserve’s meeting minutes for more clarity on future interest rate policy. The Fed left its benchmark rate unchanged last month at 4.25%-4.5%, citing the need for further data before making additional moves—particularly as trade dynamics weigh on economic forecasts.

Tesla Takes a Hit as Musk Steps into Politics

Tesla (NASDAQ:TSLA) shares tumbled sharply after CEO Elon Musk revealed plans to launch a new political initiative called the “America Party.” Analysts at Wedbush cautioned that Musk’s foray into politics comes at a sensitive time for Tesla, which is grappling with weakening sales and a major strategic shift toward autonomous vehicles. “This is the last thing Tesla shareholders want to see,” Wedbush wrote in a note, highlighting concerns over Musk’s focus and ongoing clashes with President Trump, particularly around the controversial “Big Beautiful Bill.”

Other Market Movers

Kalvista Pharmaceuticals (NASDAQ:KALV) surged after the FDA approved its new oral treatment for a hereditary swelling disorder, marking a milestone in rare disease therapeutics.

Geo Group (NYSE:GEO) and CoreCivic (NYSE:CXW) rose following the passage of a federal spending bill that boosts funding for immigrant detention programs.

Stellantis (NYSE:STLA) saw its stock drop after the National Highway Traffic Safety Administration launched a probe into over 1.2 million Ram trucks over potential transmission issues.

Oil Prices Rebound

In commodities, crude oil prices reversed earlier losses after OPEC+ announced a larger-than-expected production increase for August. Brent crude rose 1% to $68.97 per barrel, while U.S. West Texas Intermediate (WTI) gained 1.3%, climbing to $67.38.

U.S. equity futures edged lower Monday as investors braced for potential disruptions tied to the expiration of President Donald Trump’s tariff moratorium. The White House is reportedly preparing to notify countries of new trade levies by July 9, a key date that could reshape global trade dynamics. Meanwhile, tensions rise as Trump criticizes Elon Musk, who hinted at launching a new political party.

Futures Dip Ahead of Key Tariff Deadline

Wall Street appeared set for a soft open to the week, with futures contracts under pressure amid growing speculation around U.S. trade policy. As of 03:30 ET (07:30 GMT), futures tied to the Dow Jones Industrial Average were down 149 points (-0.3%), S&P 500 futures slipped 31 points (-0.5%), and Nasdaq 100 futures lost 126 points (-0.5%).

U.S. markets remained closed on Friday in observance of Independence Day, but attention has already shifted to what’s expected to be a volatile period ahead. Despite strong seasonal trends—July is historically the best month for the S&P 500, with an average gain of 2.5%—investors are closely watching policy risks and macroeconomic uncertainty.

The recent passage of a large spending and tax package has provided some relief, but questions remain about the path of inflation and corporate earnings for Q2, both of which could heavily influence sentiment in the coming weeks.

Tariff Uncertainty Lingers

President Trump reiterated that letters detailing new tariff rates will be sent out soon, though the timing of their enforcement remains murky. While the 90-day pause on the so-called “reciprocal” tariffs is officially set to expire July 9, some reports suggest implementation may be delayed until August 1.

“We’ll have deals or letters to most countries by the 9th,” Trump said, while Commerce Secretary Howard Lutnick added that the effective date for new tariffs will be August 1.

The U.S. has made headway with Vietnam, the United Kingdom, and China, reaching preliminary arrangements, but talks are still ongoing with several other trading partners. According to ING analysts, “There’s still a wide range of possible outcomes—last-minute deals, substantial tariff hikes, or further extensions.”

Trump has floated tariff increases from 10% up to 70%, amplifying concerns among businesses about long-term trade policy unpredictability.

BRICS Nations Targeted With Additional Duties

In a separate development, Trump announced plans to impose an extra 10% tariff on countries aligned with BRICS, accusing them of pursuing policies hostile to U.S. interests.

The BRICS bloc—comprising Brazil, Russia, India, China, and South Africa—has expanded to include Egypt, Indonesia, Iran, Saudi Arabia, and the UAE. The group had previously explored creating an alternative currency to the U.S. dollar, though that initiative now appears shelved.

“Any country supporting the anti-American agenda of BRICS will face an additional 10% duty, no exceptions,” Trump wrote on his social media platform. The remarks coincide with a BRICS summit in Brazil, where member states criticized rising protectionism and condemned U.S. policies targeting Iran.

Trump Slams Musk Over New Party Plans

Tensions also escalated between Trump and Elon Musk, following Musk’s announcement that he intends to launch a new political organization, the America Party.

Musk, who was a key financial backer of Trump’s 2024 campaign, has since distanced himself, criticizing the president’s economic policies. Trump responded sharply on Truth Social, saying he was “disappointed to see Elon Musk going off the rails,” and alluded to how Musk could be impacted by the removal of EV subsidies in the latest fiscal bill.

Oil Markets Fluctuate After OPEC+ Supply Move

Crude oil prices traded near flat early Monday after OPEC+ announced plans to boost production by 548,000 barrels per day (bpd) in August—a larger increase than previous months and one that raised concerns of oversupply.

At 03:31 ET, Brent crude was down 0.1% at $68.25 per barrel, while WTI edged up 0.1% to $66.56.

The production increase follows prior monthly hikes of 411,000 bpd in May, June, and July, and may be followed by another similar rise in September, pending the outcome of the group’s next meeting on August 3.

The move continues the gradual rollback of a 2.2 million bpd voluntary cut led by Saudi Arabia and Russia earlier this year to stabilize markets.

European equity markets showed a lack of clear direction on Monday, with investors adopting a cautious stance ahead of an imminent U.S. trade policy deadline that could reshape global economic relations.

By 07:05 GMT, Germany’s DAX was up 0.3%, France’s CAC 40 rose 0.1%, while the UK’s FTSE 100 edged down 0.1%, reflecting the underlying uncertainty across markets.

Global Focus Turns to Trump’s Trade Ultimatum

Investors are bracing for potential volatility as the July 9 deadline set by U.S. President Donald Trump for finalizing trade deals approaches. The White House had temporarily held off on imposing sweeping tariffs after the April 2 “Liberation Day” announcement, giving international partners a 90-day window to negotiate new agreements.

Trump said over the weekend that multiple trade deals are nearing completion, while countries that have not reached an agreement will receive formal notifications of higher duties taking effect from August 1.

However, confusion remains over the actual tariff levels. While initial plans called for rates between 10% and 50%, Trump has since floated figures as high as 60% or 70%, adding further uncertainty. He also hinted at additional penalties—up to 10%—for nations perceived to align with anti-U.S. policies, including some BRICS members.

Positive Industrial Output in Germany

In macroeconomic news, Germany’s industrial production unexpectedly rose in May, with output increasing 1.2% month-on-month, supported by gains in the automotive and energy sectors. Analysts had forecast flat growth, making the results a welcome surprise.

Meanwhile, U.K. housing market data highlighted a continuing slowdown. According to Halifax, home prices were flat in June, with May’s figure revised slightly to show a 0.3% decline. The soft data reflects the impact of recent tax increases on property transactions that took effect in April.

Capgemini to Acquire WNS for $3.3 Billion

On the corporate front, Capgemini (EU:CAP) announced it will acquire WNS Holdings (NYSE:WNS) for $3.3 billion, a move aimed at bolstering its position in AI-driven business consulting. The deal marks Capgemini’s push into enterprise transformation services, as firms increasingly look to leverage AI to modernize operations.

Shell Warns of Weak Q2

Shell (LSE:SHEL) issued a trading update indicating that its second-quarter performance will likely weaken, citing lower profitability in its Integrated Gas and Chemicals businesses. The company attributed the decline to subdued trading activity and pricing pressures.

Crude Falls on OPEC+ Output Hike

Oil prices retreated on Monday following OPEC+’s decision to ramp up production more than anticipated. At 03:05 ET, Brent crude fell 0.2% to $68.18 a barrel, while WTI dropped 0.1% to $66.46.

OPEC+ announced on Saturday it will raise production by 548,000 barrels per day (bpd) in August, exceeding the 411,000 bpd monthly increases previously set for May through July. The group also signaled the possibility of another similar increase in September, to be confirmed at its August 3 meeting.

The move reflects an ongoing rollback of 2.2 million bpd in voluntary cuts—originally spearheaded by major producers such as Saudi Arabia and Russia—which had been introduced to stabilize prices earlier this year.

Shares in Currys plc (LSE:CURY) dropped more than 6% on Monday after RBC Capital Markets lowered its rating on the U.K. electronics retailer, citing concerns about the stock’s limited room for further gains following a strong rally earlier in the year.

RBC cut its recommendation from “Outperform” to “Sector Perform”, noting that the stock’s 31% year-to-date rise has significantly narrowed its valuation appeal. While maintaining a price target of 140p, the analysts now see just 14% upside from the latest closing price of 124.30p.

Despite dropping the “Speculative Risk” label thanks to Currys’ strengthened balance sheet, RBC flagged that the company is now trading at roughly 11 times its projected 2025 earnings, a premium compared to its five-year average multiple of 8x, and close to the upper limit of its historical range.

According to the note, Currys’ valuation no longer appears discounted, and other retailers—like B&M and Avolta—may offer more compelling growth prospects at current levels.

Currys has been in recovery mode since late 2023, supported by strategic actions such as the divestment of its Greek business, which has made the group more attractive to investors. The company has also ramped up efforts in underpenetrated categories, including Computing, Mobile, and Health & Beauty, while continuing to expand its Services and B2B segments.

Currently, B2B accounts for just 3% of U.K. sales, compared to 12% in the Nordics. Management is targeting to double the U.K. contribution within three years, although macroeconomic factors could slow progress.

RBC remains cautious about external pressures—particularly in Nordic markets, where despite falling interest rates, consumer sentiment in Sweden and Finland remains weak, with only Denmark showing encouraging signs. In the U.K., easing real wage growth and looming tax-related uncertainties may dent consumer confidence in the months ahead.

While Currys has enjoyed multiple earnings upgrades during fiscal 2025, RBC said that forecast momentum is beginning to slow. It trimmed its FY26 and FY27 earnings-per-share (EPS) forecasts by 1%–3%, citing anticipated increases in financing costs. Revised EPS forecasts now sit at 11.7p for FY26 (down from 13.0p) and 12.6p for FY27 (previously 13.0p). However, operating profit projections remain largely intact.

Currys is expected to post modest top-line growth, with revenue increasing from £8.71 billion in FY25 to £9.07 billion in FY26, and further to £9.35 billion in FY27. Operating profit is forecast to rise from £237 million in FY26 to £249 million in FY27, with EBIT margins holding steady between 2.6% and 2.7%.

As of the end of FY25, Currys reported net cash of £184 million, and is on track to eliminate pension contributions by FY27, down from £78 million this year.

RBC’s valuation is based on a blend of discounted cash flow (DCF) and sum-of-the-parts analysis, estimating a fair value of 134p. In a downside case—where revenues and margins deteriorate—the share price could fall to 90p, while a more optimistic scenario sees potential upside to 175p if performance beats expectations.

Investor confidence across the euro area surged in July, reaching its highest point in over three years, according to fresh survey data released Monday, signaling growing optimism as the region’s economic recovery becomes more widespread.

The latest Sentix investor sentiment index climbed to 4.5, a significant jump from 0.2 in June and well above analysts’ expectations of 1.1, as polled by Reuters. The July result marks the third consecutive monthly gain for the index.

While the current situation component of the index remained negative, it improved considerably—rising 5.8 points to -7.3. Meanwhile, expectations for the coming months advanced 2.8 points to 17.0, continuing their upward trend for the third month in a row.

The survey, conducted between July 4 and 6, revealed that investor optimism is no longer limited to a handful of economies. The data showed broad-based momentum, with the United States standing out as a key driver of global sentiment after months of underperformance.

Germany, the euro zone’s largest economy, posted its best reading in over two years. Its overall index reached -0.4, the highest since February 2022, supported by five straight months of improvement in the current assessment.

Sentix analysts noted that the strengthening economic backdrop may begin to limit how far the European Central Bank can go with additional interest rate cuts, though inflation pressures appear manageable for the time being.

The upbeat sentiment reflects growing confidence that the euro zone’s recovery is becoming more resilient, with investors betting on continued progress despite lingering macroeconomic uncertainties.

Tesla’s (NASDAQ:TSLA) stock took a sharp hit after CEO Elon Musk announced plans to create a new political party, raising concerns among investors about his ability to stay focused on the company’s core business. Pre-market trading on Monday saw shares drop over 7%, with the stock hitting $292.80 as of 04:22 ET (08:22 GMT).

In a Sunday report, Wedbush Securities cautioned that Musk’s political ambitions could weigh heavily on Tesla’s share price. The brokerage highlighted that Musk’s deeper dive into politics runs counter to what Tesla’s shareholders want, especially as the automaker faces shrinking sales and readies a shift toward autonomous driving technology.

Musk’s political move, dubbed the “America Party,” also comes amid an ongoing and public clash with U.S. President Donald Trump, particularly related to the recently passed “Big Beautiful Bill.”

Wedbush pointed out that although investors initially welcomed Musk stepping back from his involvement with DOGE, the new political venture might signal more distractions ahead. Analysts from the firm noted, “Tesla’s stock could face pressure as investors worry how Musk’s political stance might affect his relationship with Trump and the Republican Party.”

The brokerage also observed that independent political parties have historically struggled in the U.S., and Musk’s foray into politics could introduce new risks for Tesla. Wedbush hinted that the company’s board might need to step in if Musk’s political activities intensify.

Despite these concerns, Tesla shares have fallen nearly 17% so far this year. Although the stock has rebounded somewhat from its yearly lows, ongoing sales declines and worries over Musk’s political engagements continue to weigh on investor confidence.

Wedbush maintained its “Outperform” rating on Tesla with a $500 price target, expressing strong confidence in the company’s AI-driven innovations. Recently, Tesla tested its autonomous driving service in Austin, Texas, but investor response was muted. The automaker is also pursuing robotics through its Optimus project, which Musk says will enter production by 2026.

The U.S. dollar showed a slight gain on Monday, starting the week quietly as markets brace for potential turbulence linked to upcoming trade developments. With the July 9 deadline for the Trump administration’s trade tariffs fast approaching, investors are watching closely for any signs of volatility.

By 04:05 ET (08:05 GMT), the Dollar Index—which measures the greenback against six major currencies—nudged 0.1% higher to 96.932, just above last week’s three-year low.

Market Poised for Trade-Related Moves

Currency markets remained relatively stable early Monday as traders await Wednesday’s expiration of the 90-day pause on the so-called ‘Liberation Day’ tariffs. President Donald Trump indicated he would announce on Monday the countries receiving letters detailing planned tariff hikes, which are set to come into effect on August 1.

Most U.S. trading partners are expected to face significantly increased duties once the moratorium ends. However, Trump also mentioned progress towards several trade agreements anticipated in the coming days. To date, only Britain, China, and Vietnam have struck trade deals with the U.S.

Analysts at ING noted, “While threats of reinstating 50% tariffs may disrupt the current calm risk environment, with markets already positioned with a light dollar exposure, the greenback may have limited downside.”

Euro Pulls Back From Recent High

The euro slipped 0.3% against the dollar to 1.1747, retreating from last week’s peak of 1.1829—the highest level since September 2021. German industrial production surprised on the upside in May, rising 1.2% month-over-month thanks to strength in automotive and energy sectors, surpassing expectations of no growth.

Following its eighth rate cut in a year last month, the European Central Bank is expected to hold off on further easing until September, as ongoing trade uncertainties and the euro’s recent strength temper policy moves, according to Capital Economics.

European trade officials met with U.S. counterparts in Washington last week, but a comprehensive trade deal remains elusive. The EU is pushing for an “in principle” agreement that would provide immediate tariff relief on key goods. Capital Economics analysts suggest a prolonged negotiation or a vague preliminary deal is the most probable outcome.

Pound Near Recent Highs Despite Minor Dip

GBP/USD edged down 0.3% to 1.3607, maintaining proximity to last week’s 1.3787 peak—the highest since October 2021. UK house prices showed no change month-over-month in June, per Halifax data released Monday, with a slight upward revision to May’s figures.

The housing market continues to feel the effects of April’s increased property transaction taxes, keeping activity subdued.

Australian Dollar Declines Ahead of RBA Decision

In Asia, USD/JPY rose 0.4% to 145.18 as traders awaited clarity on U.S.-Japan trade negotiations, which remain complicated. The Chinese yuan inched up 0.1% to 7.1726, while AUD/USD dropped 0.8% to 0.6504, retreating from a near eight-month high hit last week at $0.6590.

Market consensus expects the Reserve Bank of Australia to reduce its cash rate by another 25 basis points on Tuesday, responding to cooling inflation pressures and uncertain economic growth prospects.

UK equities began the week on a cautious note, with the FTSE 100 slipping slightly at Monday’s open. The British pound remained steady just above the $1.36 mark, while shares of energy giant Shell (LSE:SHEL) fell sharply following a disappointing trading update.

By 07:49 GMT, the FTSE 100 was down 0.1%, and the pound weakened 0.3% against the US dollar to 1.36. Meanwhile, European benchmarks saw mixed movement: Germany’s DAX climbed 0.3%, while France’s CAC 40 edged up 0.08%.

Shell Flags Weakness in Q2 Results

Shell’s stock fell over 3% after the company revealed a cautious outlook for the second quarter, citing softer performance in its downstream segment. Production guidance was lowered to between 900,000 and 940,000 barrels of oil equivalent per day (kboe/d), slightly below the first quarter’s 927,000 kboe/d. Liquefied natural gas (LNG) volumes were also forecasted to dip to between 6.4 and 6.8 million tonnes, down from 6.6 million tonnes last quarter. Analysts at RBC Capital Markets expressed disappointment, particularly highlighting issues in Shell’s Chemicals and Products division.

Renold Reports Sluggish Start to Fiscal Year

Industrial manufacturer Renold (LSE:RNO) disclosed that product sales volumes have started fiscal 2026 below last year’s levels. The company attributed the sluggish demand to ongoing economic uncertainties, which are causing customers to postpone orders. However, Renold noted that pricing adjustments helped offset some of the impact from lower sales in the first quarter.

Ferrexpo Sees Sharp Drop in Production

Iron ore miner Ferrexpo (LSE:FXPO) announced a 40% quarter-on-quarter fall in production for Q2, citing liquidity constraints due to suspended tax refunds in Ukraine. The stock declined 2.5% following the announcement.

UK Housing Market Shows No Movement in June

According to Halifax mortgage lender data, UK house prices remained flat in June, meeting economists’ expectations. The May figures were revised to show a 0.3% monthly decrease rather than the previously reported 0.4% decline. Despite the lack of monthly growth, prices were still 2.5% higher than in June of the previous year.

China Imposes Procurement Limits on EU Medical Devices

On the global front, China announced reciprocal restrictions on medical device purchases from European Union companies. Chinese government procurement will exclude EU firms from contracts exceeding $6.3 million, as stated by the Ministry of Finance.

UK Government Dismisses Immediate End to Two-Child Benefit Cap

Back home, UK officials tempered expectations regarding the removal of the two-child cap on parental benefits. Prime Minister Keir Starmer appears intent on maintaining spending controls amid budget concerns.

Gold prices slipped during Monday’s Asian trading session, pressured by a firm U.S. dollar and renewed trade tensions following fresh tariff threats from President Donald Trump. Meanwhile, stronger-than-expected U.S. employment data last week has cooled market hopes for imminent interest rate cuts, further weighing on the metal.

Despite Trump’s renewed tariff warnings, gold failed to attract safe-haven buying, largely because the president pushed back the effective date of new tariffs from July 9 to August 1, giving trading partners additional time to negotiate.

Trump also announced plans to start issuing formal letters this week outlining tariff plans for key economies. In addition, he threatened to impose an extra 10% tariff on countries associated with the BRICS group, labeling them as “anti-American.” However, these announcements had limited impact on boosting gold demand, as the delay reduced the immediate threat of trade disruptions.

Since April, Washington has finalized only a handful of trade agreements — notably with the UK, China, and Vietnam — falling short of Trump’s ambitious target of 90 deals in 90 days.

The U.S. dollar remained steady, holding on to last week’s gains, supported by robust nonfarm payroll figures that demonstrated resilience in the labor market despite various economic challenges. This strong data sharply reduced expectations that the Federal Reserve would cut interest rates at upcoming meetings. As a result, traders largely dismissed bets on a July rate cut and even increased odds that rates will stay steady through September, according to CME FedWatch.

A firmer dollar typically puts downward pressure on gold and other metals, as they become more expensive for holders of other currencies. Alongside gold, other precious metals also declined: platinum futures dropped nearly 2% to $1,381 an ounce after a strong rally in June, while silver futures slipped 0.6% to $36.91 an ounce.

Industrial metals felt the pressure too, with benchmark copper futures on the London Metal Exchange easing 0.6% to $9,807 per ton, and U.S. copper futures falling 1% to $5.013 per pound.

Oil prices fell sharply in Asian trading on Monday after OPEC+ announced a bigger-than-expected production boost for August, fueling concerns over oversupply.

As of 21:06 ET (01:06 GMT), Brent crude futures for September delivery declined 1.1% to $67.50 per barrel, while West Texas Intermediate (WTI) futures dropped 2.1% to $65.59 per barrel. Both contracts had gained 1–2% last week following sharp losses in late June.

OPEC+ Raises Output More Than Forecast

OPEC+ declared an increase of 548,000 barrels per day (bpd) for August, exceeding market expectations and surpassing previous monthly increases of 411,000 bpd in May, June, and July—each already three times the originally planned tapering. The group also signaled the possibility of another 548,000 bpd hike in September.

This continued rollback of voluntary cuts totaling 2.2 million bpd by major producers such as Saudi Arabia and Russia signals a shift from defending prices to defending market share. Analysts at ING note that larger supply hikes will likely deepen the oil market surplus later this year, putting further downward pressure on prices.

U.S. Tariff Deadline Postponed to August 1

The OPEC+ decision comes amid global economic uncertainties, including concerns about China’s growth and ongoing U.S. trade policy developments. President Donald Trump announced a delay in tariff implementation, extending the deadline from July 9 to August 1. This shift adds uncertainty to the trade outlook, as fears of trade barriers potentially dampening economic activity and energy demand persist.