U.S. Markets trimmed early gains on Tuesday as market participants continued to assess the impact of tariffs that the U.S. may pass and the outlook of the Federal Reserve’s policy following the release of CPI data.
Market sentiment turns cautious as June’s U.S. Consumer Price Index (CPI) matched forecasts at 0.3% month-over-month (MoM), while Core CPI (excluding Food & Energy) came in slightly softer at 0.2% MoM vs. 0.3% expected. On a yearly basis, headline CPI rose to 2.7% (above 2.6% forecast) and Core CPI edged up to 2.9% (just under 3.0%), keeping inflation elevated and adding pressure on the U.S. Federal Reserve (Fed) to stay cautious on future rate cuts.
This shift tested U.S. Dollar (USD) bulls briefly, though Trump’s push for rate cuts and recent hawkish comments from Cleveland Fed President Beth Hammack kept the policy outlook mixed.
Bitcoin (BTC/USD) bounced from intraday lows, trading near $117,400, while Gold (XAU/USD) trimmed early gains, hovering around $3,325. The U.S. Dollar Index (DXY) extended gains, continuing a three-day winning streak.
Tensions rose as Trump reinstated a 17% anti-dumping duty on Mexican tomatoes, with the European Union (EU) preparing to retaliate if talks fail—though not before August 1. Japan, Mexico, and Canada are also racing to secure trade deals to avoid U.S. tariffs.
Geopolitical uncertainty intensified after a Financial Times (FT) report claimed Trump urged Ukraine to escalate attacks on Russia, prompting a cautious response from the Kremlin. Trump’s wavering stance on NATO and continued support for Ukraine added to market nerves.
Meanwhile, Japan and the EU are strengthening trade ties amid U.S. pressure, and Moody’s issued a warning over the U.S. housing market, adding to global concerns.
On the corporate side, tech stocks rallied as NVIDIA resumed chip exports to China, and Meta Planet unveiled plans to pour hundreds of billions into AI infrastructure.
In Asia, China’s Q2 GDP and industrial production beat expectations, though weaker retail sales and home prices sent mixed signals.
Elsewhere, crude oil prices remain under pressure on weak demand and rising U.S. inventories. Altcoins slipped after Monday’s rally, while equities stayed firm and bond yields remained elevated following Wall Street’s modest gains.
Looking ahead, traders are watching Trump’s next moves, and market reaction to the U.S. CPI report. While Bitcoin and Gold may stay offered, crude oil and commodity-linked currencies could remain under pressure, even as stocks and yields edge higher.
