United States
US equities closed lower on Friday, retreating modestly as renewed tariff threats from President Donald Trump reignited trade uncertainty. The Dow Jones Industrial Average slipped 0.6%, the S&P 500 shed 0.3%, and the Nasdaq dipped 0.2%. The declines came after Trump announced sweeping 30% tariffs on imports from the European Union and Mexico, set to take effect from 1 August. This follows a string of recent tariff escalations targeting countries from Canada to Brazil.
Market sentiment remains fragile as investors grapple with the potential impact of punitive tariffs. While tech stocks showed resilience—Nvidia gained 0.5%, remaining above its US$4 trillion market cap—there are mounting concerns around the sector’s dominant weight within benchmark indices. Strategists noted that broader equity strength remains intact for now, but warned of growing risks should inflation data or interest rates shift materially. Adding to the uncertainty, Trump’s reported pressure campaign to remove Federal Reserve Chair Jerome Powell has raised fears of policy instability, with analysts warning of potential US dollar weakness and Treasury volatility if such action proceeds.
Looking ahead, attention turns to the US June CPI due Tuesday, with PPI and retail sales figures to follow later in the week. Corporate earnings season also kicks off, with Wall Street expecting its weakest results since mid-2023. Six major banks are due to report, alongside Netflix and ASML, with more heavyweight tech names including Alphabet, Tesla, Meta and Microsoft scheduled in the weeks ahead.
Europe
European equities dropped sharply, with the Stoxx Europe 600 Index falling 1%—its largest single-day decline in three months. Markets reversed earlier-week optimism as Trump’s broad tariff threats intensified, including a proposed 35% levy on select Canadian goods and 15–20% tariffs on a wide range of countries. Export-sensitive sectors such as luxury goods and consumer services led the decline, with shares of Kering and Moncler among the notable laggards.
Banks also underperformed, particularly DNB Bank ASA, which sank 8.8% after disappointing quarterly results. Conversely, energy names bucked the trend, with BP shares climbing on the back of encouraging earnings expectations. Analysts warned that markets may continue to recalibrate as tariff-exposed sectors come under pressure. Despite the day’s losses, the Stoxx 600 ended the week up 1.2%, though it remains 2.8% below its March peak.
The European Central Bank is next scheduled to meet on 24 July, with investors watching closely for any commentary on trade impacts and inflation pressures.
Australia
The Australian sharemarket is set to open lower, with ASX 200 futures pointing to a 13-point or 0.2% decline. However, strength in the mining sector is helping to offset global trade jitters. Iron ore prices rallied for a third consecutive week, with Singapore futures climbing to US$99.50 per tonne, their best streak since January. The ASX 200 remains just 1% shy of its record high of 8639.1 reached in June.
Heavyweight miners continue to outperform: BHP is up 10.4% over three weeks, Rio Tinto 9.1%, and Fortescue an impressive 16.8%. This rotation has come at the expense of the Commonwealth Bank, which has declined 2.6% over the same period despite gains across other major lenders.
The gains in iron ore have been driven by expectations of high-level policy meetings in China this week, which have drawn comparisons to significant infrastructure-focused gatherings in the past. Locally, Thursday’s June jobs report will be a key release, while geopolitical attention will focus on the prime minister’s upcoming visit to China.
Commodities
In commodities, Brent crude rose 3% to US$70.70 a barrel and WTI was steady around US$68.47. Gold extended its gains, rising 1% to US$3355.59 an ounce, with spot prices nudging higher again in early Asian trading to US$3364.92. Copper ticked up 0.2% to US$5.6045 per pound, while iron ore continued to gain momentum, lifting 0.5% to US$99.50 a tonne.
In currencies, the US dollar strengthened modestly, with the yen up 0.1% to 147.32 per dollar and the euro slipping 0.2% to US$1.1671. The Australian dollar edged down 0.1% to US65.70¢ in early Asia trading and sits slightly lower again at US65.60¢. The offshore yuan was little changed at 7.1724 per dollar. Bitcoin saw renewed volatility, initially dropping 0.6% to US$118,393.80 but rebounding to US$117,860, up 1.8% from Friday.
Economic Calendar
No major data
This article was written by Paul Darwell, Rivkin Securities Pty Ltd. Enquiries can be made via [email protected] or by phoning +612 8302 3632.
