Key Takeaways
- Trump’s sweeping tariff plan takes effect, targeting over 50 nations with import duties up to 41%.
- Fed holds rates steady, but internal division and persistent inflation lower the odds of near-term cuts.
- Bitcoin drops to 115K, pressured by global risk aversion.
- Gold hovers near 3,291, fueled by post-tariff volatility and investor reassessment.
Geopolitics and Market Sentiment
On August 1, global markets slid as traders reacted to sweeping changes in U.S. trade policy announced just hours before a key deadline.
President Donald Trump’s administration introduced a broad expansion of tariffs, marking the most aggressive use of trade duties in decades and signaling a clear shift away from globalization.
The new measures mark a departure from longstanding U.S. trade strategy, replacing it with a system focused on protecting domestic industries and narrowing trade deficits.
The White House unveiled a multi-layer tariff structure that will apply to nearly all imported goods. Countries with trade deficits against the United States, estimated at around 40 nations, will face a 15% import duty.
However, countries that export more to the U.S. than they import will remain under the existing 10% rate. Additionally, 26 countries, including India, Vietnam, and Switzerland will be subject to even steeper tariffs ranging from 19% to over 40%, depending on the size of their trade imbalance with the United States.
Despite existing free-trade frameworks, Mexico and Canada will also be affected. Canadian goods not covered under exemptions will face a 35% duty, up from 25%, while Mexico agreed to a 90-day extension of its current 25% tariff rate.
The new tariffs were expected to take effect immediately but have been pushed to August 7 to give U.S. Customs time to update enforcement systems.
This broad tariff wave came on the heels of a key U.S. monetary policy decision.
The Federal Reserve left its rate unchanged at 4.25% to 4.50%, offering no clear timeline for easing. Two Fed officials called for immediate rate cuts, arguing inflation no longer justifies keeping borrowing costs elevated. However, Chair Jerome Powell said price pressures remain too high, weighing on expectations for a September cut.
Similarly, the Bank of Japan also held rates steady while expressing cautious optimism on growth, which helped steady the yen.
Markets responded swiftly to the announcements. Stocks declined across major indices, Bitcoin slid to 115K, and safe-haven assets like gold rebounded as investors reassessed the outlook for global trade and inflation.
Looking ahead, markets are focused on Friday’s U.S. non-farm payrolls report, with economists expecting a slowdown to roughly 110,000 new jobs in July, down from 147,000 the previous month, and a slight rise in the unemployment rate to 4.2%.
This outlook could shape the Federal Reserve’s decision-making, as policymakers weigh whether weakening job growth could finally justify interest rate cuts in the coming months.
Global Indices
- S&P 500: 6,339.38 ▼ 0.37%
- Dow Jones: 44,130.98 ▼ 0.74%
- Nasdaq Composite: 21,122.45 ▼ 0.03%
- Nikkei 225: 40,840.00 ▼ 0.87%
- Euronext 100: 1,582.17 ▼ 1.23%
- FTSE 100: 9,110.60 ▼ 0.03%
Cryptocurrencies
- Bitcoin (BTC/USD): 115,309 ▼ 0.32%
- Ethereum (ETH/USDT): 3,669.46 ▼ 0.43%
- Binance Coin (BNB/USDT): 777.88 ▼ 0.67%
- Solana (SOL/USDT): 169.12 ▼ 1.81%
Commodities
- Gold: 3,296.76 ▲ 0.21%
- Silver: 36.58 ▼ 0.31%
- WTI Crude: 69.38 ▲ 0.04%
- Brent Crude: 70.21 ▼ 0.79%
Major Stocks
- NVIDIA (NVDA): 177.87 ▼ 0.78%
- Tesla (TSLA): 308.27 ▼ 3.38%
- Microsoft (MSFT): 533.50 ▲ 3.95%
- Meta (META): 773.44 ▲ 11.25%
- Apple (AAPL): 207.57 ▼ 0.71%
- Amazon (AMZN): 234.11 ▲ 1.70%
Forex
- U.S. Dollar Index (DXY): 99.58 ▼ 0.01%
- EUR/USD: 1.1419 ▲ 0.15%
- GBP/USD: 1.3197 ▼ 0.04%
- USD/JPY: 150.58 ▼ 0.09%
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