Markets Rally as Tariff Delay and Global Policy Signals Boost Investor Confidence

Image Source : Krish Capital Pty Ltd

Index Update: President Trump’s decision to delay a proposed 50% tariff on EU imports to July 9 boosted market optimism and risk appetite, especially after a request from EU Commission President Ursula von der Leyen. Investor sentiment was further supported by Japan’s finance ministry signaling a potential cut in bond issuance, easing concerns in its debt market. U.S. stock futures rose, with the S&P 500, Dow, and Nasdaq 100 all posting solid gains. In premarket trading, Tesla rose over 2% after Elon Musk pledged to refocus on his companies, Trump Media jumped 11% on crypto investment plans, and US Steel extended its rally amid strengthening U.S.-Japan corporate ties.

Market Movers: On Friday, the top gainers were  Merus N.V (+20.7%), followed by Rain Enhancement Technologies Holdco, Inc (+20.38%). On the contrary Bicara Therapeutics Inc (-26.88%) and Navitas Semiconductor Corporation (-12.67%) declined the most the same day.

Commodities Update: Crude oil prices rose as easing U.S.-EU trade tensions helped offset concerns about a potential increase in OPEC+ supply. WTI climbed to around $61.7 per barrel and Brent reached about $64.9 per barrel after President Trump postponed a planned 50% tariff on European imports, reducing fears of weaker fuel demand. Meanwhile, OPEC+ is expected to confirm a July output hike of 411,000 barrels per day later this week. Geopolitical tensions also supported prices, as Iran rejected a suspension of uranium enrichment, potentially prolonging sanctions that limit its oil exports.

Gold prices fell over 1% to below $3,310 per ounce, extending losses for a second day as optimism around improving U.S.-EU trade relations reduced safe-haven demand. Investors welcomed signs of progress after Trump delayed tariffs and the EU agreed to accelerate talks. Despite the drop, market sentiment remains cautious amid ongoing geopolitical risks, a widening U.S. budget deficit, and anticipation of key economic data, including the FOMC Minutes and PCE inflation figures, which could shape the Fed's rate outlook.

Macro Update: U.S. Treasury yields fell as investors showed renewed interest in U.S. assets following the long weekend. The 10-year yield dropped to 4.47% and the 30-year fell below 5%, partly due to expectations that Japan may reduce bond issuance to stabilize its debt market. Sentiment was also boosted by President Trump’s delay of planned EU tariffs, now set for July 9. Additionally, Fed official Neel Kashkari indicated support for keeping interest rates steady amid uncertainty over the inflation impact of higher tariffs.

Futures Update: U.S. stock index futures surged after President Donald Trump announced a delay in imposing significant trade tariffs on the European Union, easing concerns over a potential trade war. The Dow Jones, S&P 500, and Nasdaq 100 futures all posted strong gains, rising by around 1.4% to 1.8%.

Stocks experienced a sharp decline in early trading on Friday but managed to recover some losses throughout the session. The S&P 500 fell by 39.17 points, or 0.67%, ending the day at 5,802.83. Technical analysis shows that the current price met resistance at a confluence zone and continued to trend lower, indicating a possible short-term consolidation with a bearish bias, as previously suggested. However, the upcoming golden cross of key moving averages points to a potential shift toward a more bullish trend, which could serve as a support level in the near future. Support is anticipated around 5,733, with resistance near 5,888.