U.S. stocks rose modestly yesterday despite Trump's new tariff threats

Wall Street stocks closed marginally up on Monday as investors sidestepped any meaningful moves following U.S. President Donald Trump’s latest tariff threats, and held steady ahead of a busy week of economic data and the start of earnings season. President Trump’s announcement of steep tariffs has injected volatility, but markets remain relatively calm. Many believe the tariffs are a negotiating tactic and expect a de-escalation before the August 1 deadline, helping limit downside in equities.

The Nasdaq Composite rose to a new all-time high, outperforming other major U.S. indices. Tech stocks remain resilient as investors appear to look past escalating tariff threats and focus on upcoming earnings and continued AI driven optimism. Investors are balancing concerns about President Trump’s new 30% tariffs on EU and Mexican imports with hopes that negotiations will avert their full implementation. Market’s attention is turning to the start of the Q2 earnings season, with major banks due to report their results this week. Citigroup, JPMorgan Chase, Wells Fargo, Bank of America, Goldman Sachs, Johnson & Johnson and Netflix are among the big-name companies due to report their quarterly results. Additionally, the upcoming release of U.S. CPI data is expected to influence expectations for Federal Reserve policy amid ongoing trade tensions.

Japanese government bond investors are bracing for a potential power shift in upper house elections this weekend that could strain the country’s already frail finances, with longterm yields soaring to multi-decade highs as the vote nears. Prime Minister Shigeru Ishiba’s rapidly sliding popularity suggests even his modest goal of retaining a majority is unachievable, with a new opinion poll from national broadcaster NHK handing the ruling Liberal Democratic Party its lowest score since its return to power in 2012.

The Nifty recorded its fourth consecutive session of losses, primarily dragged down by Technology stocks yesterday. It found strong support near the crucial level of 25000 and bounced back. To negate the short-term downtrend, the Nifty must decisively surpass the resistance of 25331 on a closing basis. Any level below 25000 could drag the Nifty further towards the next support of 24733.

Indian markets are expected to open flat amid an absence of strong directional cues.

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Source: HDFC Securities Prime Research