Trump's tariff sword hangs over markets

Markets are jittery as the July 9 tariff deadline approaches, with investor anxiety mounting over potential trade disruptions. Trump announced Thursday that his administration would begin dispatching letters to various countries starting Friday, detailing the import tax rates they must pay to access U.S. markets. There is a risk that President Trump reinstates higher ‘reciprocal’ tariffs on major economies such as Japan and Europe. Round-the-clock negotiations between Indian and American officials had raised hopes of sealing a deal. However, uncertainty persists about when a comprehensive trade agreement will materialise.

The tight timeline has heightened concerns about what the coming days might bring for bilateral commerce. Robust U.S. jobs data has dimmed expectations for an imminent Federal Reserve interest rate cut, further dampening investor sentiment.

Meanwhile, positive monsoon developments offered some relief. India recorded above-normal southwest monsoon rainfall in June 2025, with cumulative precipitation 8.9% higher than the long-period average. This marked the earliest full coverage since 2020 and boosted kharif crop sowing by a robust 11% year-onyear

. In a regulatory action, SEBI barred U.S.-based quantitative trading firm Jane Street and four affiliates from Indian markets on July 3, impounding Rs 4,840 crore in alleged unlawful gains. The regulator’s 105-page order accused the firm of manipulating expiry-day movements in Nifty and Bank Nifty indices to mislead traders and profit from options positions.

On the domestic front, India Inc.’s first-quarter earnings season for FY26 kicks off this week, with IT giants TCS and Tata Elxsi scheduled to announce results on July 10, followed by retail major DMart on July 11. Indian markets are expected to open muted , driven by developments in trade deal progress and the performance of earnings season against consensus estimates

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Source: HDFC Securities Prime Research