LONDON (Reuters) -A look at the day ahead in U.S. and global markets by EMEA Breaking News Markets Correspondent, Lucy Raitano.
U.S. President Donald Trump has issued 14 letters to global trade partners laying out sharply higher tariffs and a new deadline of August 1.
Among the recipients are major U.S. trade partners Japan and South Korea, as well as other players like Thailand and Malaysia.
It is the latest gyration in a global trade war unleashed by Trump in April that sent countries scrambling to cushion their economies as they hashed out potential trade deals with the U.S.
Mike Dolan is enjoying some well-deserved time off over the next week, but the Reuters markets team is here to provide you with all the information you need to start your day.
Today’s Market Minute
* U.S. President Donald Trump on Monday ramped up his trade war telling 14 nations, from powerhouse suppliers such as Japan and South Korea to minor trade players, that they now face sharply higher tariffs from a new deadline of August 1.
* Developing nations at the BRICS summit on Monday brushed away an accusation from President Trump that they are “anti-American,” with Brazil’s president saying the world does not need an emperor.
* China warned the Trump administration on Tuesday against reigniting trade tension by restoring tariffs on its goods next month, and threatened to retaliate against nations that strike deals with the United States to cut China out of supply chains.
* President Trump, hosting Israeli Prime Minister Benjamin Netanyahu at the White House on Monday, said the United States had scheduled talks with Iran and indicated progress on a controversial effort to relocate Palestinians out of Gaza.
* Saudi Arabia’s drive to rapidly increase OPEC+ oil output may put Riyadh in the pole position to regain market share today while also solidifying its dominance over the long term, says ROI energy columnist Ron Bousso.
* In his latest piece, ROI columnist Clyde Russell discusses the lack of volatility in iron ore prices so far in 2025, despite the ongoing uncertainty surrounding the tariff policies of U.S. President Donald Trump and the impact these will have on global trade and economic growth.
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Aside from an initial drop in U.S. stocks on Monday after the latest ratcheting-up of Trump’s trade war, traders seem to be taking the threat of sharply higher tariffs in their stride.
By and large, it’s been business as usual on Tuesday for markets, now well-versed in the nebulous and fast-changing trade policy approach the U.S. has adopted under Trump’s leadership, and particularly since his fateful April 2 “Liberation Day” announcements.
The initial deadline of July 9 has been replaced by August 1, providing some breathing room.
S&P 500 futures are barely in positive territory, while Europe’s benchmark STOXX 600 was pretty flat for most of the European morning.
Even the VIX volatility index is down a touch, having remained largely range-bound for the past two months.
One area still sensitive to the twist and turns of Trump’s tariffs, however, is gold, which has soared to an all-time high in 2025 as traders hedged against trade policy uncertainty.
So while the rest of the market yawns at the latest see-sawing in Trump’s global trade war, is the yellow material one area where stronger views – and bigger price swings – could materialise?
Citi analysts warn that with no big trade war and U.S. economic data continuing to remain robust, gold could drop a steep 20% from current levels of around $3,300 an ounce. But even that decline would keep the price of gold a sliver above where it started the year.
Other analysts remain bullish on the precious metal as a hedge given high geopolitical risks and a general move to diversify away from U.S. assets.
One segment of the market that did not hit the snooze button on Tuesday are European spirit makers, up after daily Italian newspaper Il Messaggero reported there is a possibility wines and alcohol could be completely excluded from tariffs, amid EU-U.S. trade negotiations.
With Remy Cointreau, Campari and Pernod Ricard up between 1.7% to 3.4%, it might be worth keeping an eye on U.S. peers for some read-across.
The euro is maintaining its position as a beneficiary of the trade war, up 2% against the U.S. dollar in the past two weeks and rising 0.3% on Tuesday against a faltering dollar. Markets think the European Union is likely to dodge the latest round of Trump’s trade threats. So far, so good.
Even the global recession fears which flared up at the prospect of a worsening trade war have largely receded, and with the U.S. employment picture holding up and markets anticipating Federal Reserve rate cuts on the horizon, it will take more than a few strongly-worded letters to rattle investors.
Chart of the day
The price of gold is up 26.6% in 2025, soaring past the key psychological threshold of $3000 dollars per ounce in March 2025 as traders hedged against tariff uncertainty, while increased geopolitical risks and a move away from U.S. assets by big investors and central banks pushed prices higher.
Today’s events to watch
* Auction sale of 3-year notes
* NY Federal Reserve consumer inflation expectations for June
* U.S. consumer credit data for May
Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.
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