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Wall Street Stumbles as Trump’s Tariff Threats Rattle Global Markets

U.S. stock markets kicked off the week in the red as renewed trade tensions sparked by former President Donald Trump sent shockwaves through Wall Street. The Dow Jones Industrial Average tumbled over 400 points, while the S&P 500 and Nasdaq Composite dropped 0.8% and 0.9% respectively. The sell-off followed Trump’s announcement of sweeping new tariffs set to take effect on August 1. In a series of public letters posted to social media, Trump warned that countries including Japan, South Korea, South Africa, and Malaysia would face levies ranging from 25% to 40% unless trade agreements are finalized by a self-imposed July 9 deadline. Adding to the market jitters, Trump declared that any nation aligning with the “Anti-American policies of BRICS” would be hit with an additional 10% tariff, escalating tensions with key trading partners like China and India. The tech sector bore the brunt of the downturn, with Tesla shares plunging nearly 7% amid political controversy surrounding CEO Elo...
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Bond Investors Prepare for Fed Interest Rate Cuts

 

Bond investors are anticipating a change in the Federal Reserve’s interest rate policy, with expectations of multiple rate cuts this year and the first since the start of the COVID-19 pandemic in 2020. 

Portfolio managers have increased bets on long-duration U.S. Treasuries ahead of the meeting, reflecting expectations that yields on those securities will decline as the U.S. central bank moves toward cutting rates. 

As the economy slows, longer-duration bonds tend to outperform other assets. The Fed is widely expected to hold interest rates steady at the end of its two-day policy meeting on Wednesday, with some investors seeing a possibility that it could ramp up its dovish tone after it was perceived to have pivoted from a tightening policy outlook at its meeting last month.


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