U.S. Markets Struggle Between Tariff Pressure and Tech Rally: U.S. markets saw mixed performance this week,
caught between sharp political rhetoric and controversial trade policies led by former President Donald Trump,
and a strong rally in tech stocks, most notably Nvidia, which briefly crossed a $4 trillion market capitalization.

Content

Global Producers

Treasuries Rebound

Division Within the Federal Reserve

Return of Fast Money

Tariff Pressure and U.S. Asset Sell-Off

Trade tensions resurfaced after Trump announced a 50% tariff on copper imports starting August 1,
alongside a new wave of duties targeting several countries.
These included 50% tariffs on Brazil, 30% on Algeria, Libya, Iraq, and Sri Lanka, 25% on Brunei and Moldova,
and 20% on the Philippines.
Trump linked the Brazil decision to how former President Jair Bolsonaro was treated,
calling for charges against him to be dropped. In response,
Brazilian President Luiz Inácio Lula da Silva vowed to retaliate under a “reciprocal treatment law.”

Copper futures surged on the news, with London Metal Exchange contracts rising 0.4% to $9,664.50 per ton,
and COMEX copper gaining around 3%.
Meanwhile, Brazilian assets declined, and the Brazilian real fell sharply,
and emerging markets turned cautious.
The S&P 500 futures and U.S. dollar index dropped 0.1%,
extending the “sell U.S. assets” trend that has pulled the dollar down 8.7% year-to-date.
Carol Kong, FX strategist at Commonwealth Bank of Australia,
said the post-tariff dollar drop signals that “the U.S. asset sell-off narrative remains strong.”

Wall Street Shrugs Off Concerns, Nears Record Highs

Wall Street showed notable resilience despite trade tensions, with the S&P 500 nearing its record highs.
The large-cap index rose 1.1%, bolstered by Nvidia’s performance,
whose stock has climbed more than 1,000% since the beginning of 2023
and now accounts for approximately 7.5% of the index’s total weight.
Nvidia’s gains pushed its annual return above 20%.
According to Bespoke Investment Group,
companies surpassing trillion-dollar milestones historically continue to climb.

Risk appetite surged elsewhere, with Bitcoin surpassing the $112,000 mark for the first time.
CNN’s “Fear & Greed” index categorized market sentiment as “extreme greed,” highlighting bullish momentum.

Global Copper Shipments Accelerate

In response to looming tariffs, global producers rushed to ship copper
to destinations such as Hawaii and Puerto Rico to speed up delivery.
Simultaneously, Japanese government bonds drew investor focus,
with a major 20-year bond auction approaching amid rising yields and election-related fiscal concerns.

Treasuries Rebound After Selloff

Following five consecutive sessions of selling, U.S. Treasury bonds saw a rebound.
Yields on the 10-year notes fell by six basis points to 4.34%.
A successful $39 billion auction delivered a yield of 4.362%
, slightly below expectations, signaling strong demand.
A 30-year bond offering worth $22 billion is expected soon.

Fed Divided on Inflation Risks from Tariffs

Minutes from the Federal Reserve’s June 17–18 FOMC meeting revealed a stark division over the inflationary impact of tariffs.
Some officials expected a one-time price bump with limited long-term effects,
While most warned of potentially lasting inflationary pressure.
Although this uncertainty delayed rate cut decisions, Chris Zaccarelli of Northlight Asset Management emphasized
that bullish market sentiment remains intact, citing confidence in economic strength and earnings stability.

Fast Money Returns Amid Growing Optimism

Short-term investors—often labeled “fast money”—have started reentering U.S. equities after missing the latest rally.
According to a positioning index by BNP Paribas, which tracks hedge funds, commodity advisors,
and volatility-targeting funds, equity allocations are nearing neutral, indicating renewed confidence.

Craig Johnson of Piper Sandler noted that “the trend remains upward despite tariff anxieties.”
Adding that investors are now less reactive to negative news and more focused on technical signals.

Goldman Sachs also raised its U.S. equity forecasts this week, citing the ongoing strength of large-cap stocks.
Anthony Saglimbene of Ameriprise stated that if economic activity stabilizes and earnings hold up,
especially in tech markets, they could continue their upward trajectory through year-end.
Still, he cautioned that “disappointment risks are elevated,
especially given the volume of political headlines emerging from the White House.”

U.S. Markets Struggle Between Tariff Pressure and Tech Rally

U.S. Markets Struggle Between Tariff Pressure and Tech Rally:

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