Tariff Tensions Rattle Sentiment Amid Earnings Anticipation

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Index Update:  U.S. stock futures declined around 0.5% on Friday as investors reacted to renewed tariff threats from the Trump administration, including a 35% levy on Canadian imports and plans for broader 15–20% tariffs on other partners. This followed record closes for the S&P 500 and Nasdaq. Market sentiment was also cautious ahead of the upcoming earnings season and key economic data like the CPI. Megacap tech stocks traded lower in premarket action, and for the week, the S&P 500 and Nasdaq remained flat, while the Dow dipped 0.4%.

Market Movers:  On Thursday, the top gainers were DallasNews Corporation - Series A (+208.88%), followed by Q32 Bio Inc (+119.87%). On the contrary mF International Limited (-86.34%) and Concorde International Group Ltd (- 79.91%) declined the most the same day.

Commodities Update:  Oil prices rebounded, with WTI and Brent crude futures rising above $67 and $69 per barrel, respectively, after a previous session decline. The recovery was driven by strong short-term demand from summer travel and power generation, and large shipments to China, despite concerns of potential oversupply later in the year. The IEA raised its supply growth forecast and cut demand projections, while OPEC+ may significantly increase production. Geopolitical tensions also supported prices, with speculation around new U.S. sanctions on Russia. Precious metals extended gains as trade tensions escalated. Gold climbed near $3,330 per ounce and silver surged above $37, its highest in over 13 years, as investors sought safe-haven assets following the announcement of steep U.S. tariffs on Canadian and other imports. Despite a resilient U.S. labor market and strong job data, markets are still pricing in two Fed rate cuts this year, while a stronger dollar slightly capped metal gains.

Macro Update:  President Donald Trump announced a 35% tariff on Canadian imports starting August 1, warning of further hikes if Canada retaliates. This is in addition to existing 25% sectoral tariffs. He also signaled plans for blanket tariffs of 15–20% on most other trade partners, including allies like Japan and South Korea, as part of a broader escalation in his trade agenda. Trump indicated not all countries would receive formal notice, stating the tariffs would apply universally and be finalized soon.

Bonds Commentary:  The 10-year U.S. Treasury yield held steady around 4.36% after a volatile week driven by rising trade tensions and evolving monetary policy expectations. Markets reacted cautiously to President Trump's announcement of steep new tariffs, while strong labor data and Fed officials' resistance to politically motivated rate cuts reinforced confidence in the economy's resilience.

Dollar Commentary:  The U.S. dollar index rose toward 98, heading for a 1% weekly gain, driven by heightened trade tensions and shifting monetary policy signals. Fresh tariff announcements, including a 35% levy on Canadian imports and broader global tariffs, boosted safe-haven demand. Meanwhile, Fed officials reaffirmed a focus on inflation and employment, rejecting politically driven rate cuts. Stronger dollar performance was noted particularly against the yen and euro.

Futures Update:  U.S. stock index futures declined following President Donald Trump's announcement of a 35% tariff on Canadian imports, heightening concerns about trade policy impacts. While Wall Street closed higher in the previous session, with the S&P 500 and Nasdaq hitting record highs, overall sentiment remains cautious. The major indexes are on track to end the week with minimal gains, with the Dow hovering near flat and the S&P and Nasdaq up slightly.

Stock markets experienced a predominantly upward movement on Thursday, building on the robust gains recorded during Wednesday’s session. The S&P 500 edged higher by 17.22 points, or 0.27%, closing at 6,280.47. From a technical standpoint, the index remains above critical resistance levels, indicating the potential for continued short-term gains. However, given the overbought conditions, a minor intraday correction cannot be discounted. Additionally, the 14-period Relative Strength Index (RSI) is trending upward, signifying ongoing bullish momentum unless a divergence occurs. Key support levels are identified around 6,100, with resistance expected near 6,380.