Markets Today: Global Shares Recovery Continues, Tariff Implementation, FTSE 100 Hovers Near All-Time Highs

[Redator]

Asia Market Wrap - Nikkei Recovers After Largest Drop in Two-Months

Asian stocks went up as investors bought the dip and grew hopeful about possible interest rate cuts.

The MSCI Asia Pacific Index rose 0.6%, with South Korean stocks gaining 1.4%. Japan's Nikkei also climbed 0.7% after a big drop on Monday, its largest in two months.

Traders are now expecting the Federal Reserve to cut interest rates after last Friday's weak jobs report. That report had caused stocks to fall and bond prices to rise sharply. Since hitting lows in April, stocks have bounced back as people feel more confident that U.S. companies can handle tariffs and the economy might avoid a recession.

In Japan, demand for 10-year government bonds was weaker during an auction on Tuesday. This came after the poor U.S. jobs data increased expectations of an early Fed rate cut, which pushed bond yields lower. The 10-year bond yield dropped 4 basis points to 1.465% after the auction.

China's blue-chip CSI300 Index rose 0.4%, and the Shanghai Composite Index went up 0.6%. Vietnam's stock index jumped 2.4%, hitting a new record high.

Data from Asia's two largest economies showed strong performance in their service sectors. In Japan, the services PMI (a measure of business activity) increased to 53.6 in July from 51.7 in June, marking the fastest growth since February. Meanwhile, China's services sector grew at its quickest pace in over a year last month.

Reciprocal Tariff Implementation

President Donald Trump’s new tariffs won’t apply to products already shipped to the U.S. before 12:01 a.m. New York time on Thursday, according to U.S. Customs and Border Protection.

Trump also announced plans to significantly increase tariffs on Indian exports to the U.S. due to India’s purchase of Russian oil. India criticized the move, calling it unfair, as tensions rise between the two countries.

Meanwhile, the U.S. is looking into ways to improve chips with better location-tracking features. This is part of Washington’s efforts to limit the export of semiconductors, like those made by Nvidia, to China.

European Open - Recovery Continues

Global shares built on Mondays gains which saw US shares rally. The rally was largely inspired by positive earnings reports and increasing bets for a September rate cut from the Fed after disappointing jobs data on Friday.

In Europe, the STOXX 600 index went up 0.4% in early trading, marking its second day of gains. This followed the positive trend in Asian markets, where the MSCI Asia-Pacific index (excluding Japan) rose 0.8%.

The second-quarter U.S. earnings season is almost over, but investors are still waiting for reports this week from companies like Walt Disney and Caterpillar.

Big tech companies like Nvidia, Alphabet, and Meta saw strong gains overnight, while Palantir Technologies raised its revenue forecast again this year, expecting continued demand for its AI services.

U.S. stock futures were up 0.2%, suggesting a small rise when trading begins.

On the FX front, the dollar rose slightly, gaining 0.1% against the Japanese yen to 147.23. Meanwhile, the euro dropped 0.1% to 1.1559. The dollar index, which measures the dollar against six other major currencies, went up 0.2% after falling for two days.

Currency Power Balance

Source: OANDA Labs

Gold continues to hold the high ground this morning as rate cut bets are likely underpinning the precious metal. Jitters around the Fed and President Trump as well as concerns around tariffs may also be aiding gold prices at present.

Oil prices fell for the fourth day as worries grew about a weak economy and too much supply. Brent crude futures dropped to $68.45 a barrel, their lowest in two weeks.

For a full and comprehensive analysis on WTI OIL read WTI Oil Slips to 100-day MA Following OPEC + Output Hike. What Next?

Economic Data Releases and Final Thoughts

Looking at the economic calendar, we have had a host of PMI data from the Euro Area this morning. This will be followed by US PMI data during the US session.

Earnings season, tariff developments and comments from the Federal Reserve could remain key to overall market sentiment. Markets do remain concerned about the political interference we are seeing following Trump's firing of the head of the bureau of labor statistics. This could keep markets in check in the near term which could benefit some safe havens moving forward.

Chart of the Day - FTSE 100 Index

From a technical standpoint, the FTSE 100 index continued its march higher as discussed in yesterday article Markets Today: Shares Rebound on US Rate Cut Bets, FTSE 100 Eyes Gains.

The index has however failed to print fresh all-time highs.

The question now is whether we will get a break higher or another pullback.

Immediate support rests at 9100 before the 9048 and 9000 handles come into focus.

The upside does not have any historical data to focus on and thus I will look toward first the previous all-time highs at 9194 before the psychological numbers like 9250 and potentially 9500.

FTSE 100 Daily Chart, August 5. 2025

Source: TradingView.com (click to enlarge)

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