U.S. Equity Markets Show Mixed Signals Amid Tariff Tensions
On July 10, U.S. equity markets displayed a mixed performance as investors grappled with President Donald Trump’s latest tariff policies aimed primarily at Brazil. In particular, the Nasdaq saw a decline, primarily driven by weaknesses in software stocks. Meanwhile, the broader market remained relatively steady, buoyed by a record high from the previous session, which had been largely driven by momentum in the artificial intelligence (AI) sector.
The day was marked by heightened tensions surrounding Trump’s announcement of a significant 50% tariff on Brazilian imports and copper, set to take effect on August 1. This announcement stemmed from political disputes involving his ally, former Brazilian President Jair Bolsonaro. The new tariffs sparked a robust response from Brazil’s current president, Luiz Inácio Lula da Silva, raising fears of a potential trade conflict between the two nations, thereby adding layers of complexity to the global trading landscape.
As investors digested the potential repercussions of these tariffs, economic data provided a glimmer of resilience. Initial jobless claims came in below expectations at 227,000 for the prior week, signaling stability in the labor market. However, minutes from the Federal Reserve’s June meeting indicated a more cautious approach among policymakers. Many members expressed hesitance to support immediate rate cuts due to ongoing inflation concerns linked to the recent tariffs.
In a bid to influence market sentiment, Trump took to Truth Social on Thursday, advocating for rate reductions. He noted gains in tech and industrial stocks, alongside a surge in cryptocurrency values, alluding to the revenue generated from tariffs. Trump maintained that these indicators pointed towards economic strength. Nevertheless, the Fed’s wait-and-see strategy leaves a cloud of uncertainty hanging over the markets as the week approaches its end.
Market Outlook and Technical Analysis
Shifting focus to market outlook, my analysis indicates a bullish trajectory for U.S. markets as of July 11. This positive sentiment is driven by converging business cycles, investor optimism, and structural trends. The economy appears to be in the mid-to-late growth phase, showing robust earnings and a lack of clear recession signals. Furthermore, investor sentiment has started to turn positive without reaching euphoric highs, while low volatility echoes conditions reminiscent of the 1990s digital boom.
Looking ahead, I anticipate a summer rally fueled by advancements in AI, as well as growth in the banking and commodities sectors. Investors are advised to keep pace with this positive momentum. Declining inflation rates and potential easing from the Federal Reserve could serve to elevate overall valuations, despite the possibility of external shocks that might lead to market corrections. As we head into late 2025, maintaining vigilance on price trends will be essential.
Examining technical metrics, the Nasdaq 100 Index confirms a robust medium-to-long-term uptrend. Since reclaiming its ascending channel in May 2025, the index reflects strong buyer interest, signaling a positive trajectory for the market. Immediate resistance levels are positioned between 24,000 and 24,500, aligning with the upper boundary of this channel, while critical support resides near 22,200. This support level provides a buffer against potential downturns.
Momentum indicators further substantiate this bullish outlook for the Nasdaq 100. The technical structure supports a favorable market climate in the medium to long term, establishing the Nasdaq as a reliable venture for investors during this evolving economic landscape.
The writer is an equities specialist at Phillip Securities Research.
