Trade deals trump tariff fears

The S&P 500 jumped 0.78% and the Nasdaq rose 0.43%, both closing at record highs. Investors welcomed a trade agreement between the U.S. and Japan, easing tariff concerns and reviving hopes for additional deals with the EU and other partners. The European Union and the United States are nearing a trade agreement that would set a uniform 15% tariff on European imports, according to a Financial Times report. Under the proposed deal, both sides would eliminate tariffs on selected goods, including aircraft, spirits, and medical devices. Crucially, auto tariffs—currently at 27.5%—would be reduced to 15%.

The newly signed 15% tariff deal with Japan, which is lower than the expected 25%, has eased market anxiety about a looming tariff deadline. Hopes now run high that upcoming deals will avert a global trade war, driving gains in industrials, healthcare, and AI-driven stocks. Alphabet (Google) beat Q2 expectations and reaffirmed its AI investment, while Tesla missed revenue expectations and warned of turbulent quarters ahead, leading to mixed post-market moves.

On the economic front, the U.S. housing market showed signs of softening. Existing home sales fell to 3.93 million in June, missing the forecasted 4.00 million. This represents a monthly decline of 0.11 million, or approximately 2.7%, suggesting a cooling in consumer demand. Japan’s manufacturing activity slipped into contraction in July, weighed down by uncertainties over U.S. tariffs, according to a private-sector survey released on Thursday.

Shares in Asia rallied and the Australian dollar reached an eight-month high on Thursday, as optimism over earnings and trade boosted demand for higher-yielding assets. Oil prices rose on Thursday, buoyed by optimism over U.S. trade negotiations that would ease pressure on the global economy and a sharper-than-expected decline in U.S. crude inventories.

Fueled by strong global cues, the Nifty resumed its upward trajectory yesterday. It maintained a strong uptrend throughout the day. The benchmark finally settled the session with a gain of 159 points, or 0.63%, closing at 25,219, marking its highest close since July 10th, 2025. Nifty reclaimed its level above 20 DEMA, currently placed at 25185. Immediate resistance for the Nifty is seen at 25255, above which it could extend the gains towards the downward-sloping trendline resistance of 25360. Support for Nifty has shifted higher near the 25000 levels.

Indian markets are likely to open mildly higher on the back of positive global cues.

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Source: HDFC Securities Prime Research