Tariff Deadline in July: A Threat Looming on Global Markets

In the week gone by, the global market reflected optimism but was tempered by the upcoming U.S. tariff deadline in July and geopolitical risks. In this blog, we’ll know in detail what happened last week (June 23, 2025 to June 27, 2025) all across the globe.

Ceasefire on Middle East Stress

The U.S. airstrikes on three Iranian nuclear sites (Natanz, Isfahan, and Fordow) on June 21, 2025, escalated tensions in the Middle East, initially driving Brent crude oil prices up by over 10% to around $79 per barrel due to fears of supply disruptions, particularly through the Strait of Hormuz, a critical oil chokepoint.

This spike reignited concerns of a broader conflict, with Iran’s retaliatory missile strikes on a U.S. airbase in Qatar and Israel’s continued attacks adding to market volatility. However, President Donald Trump’s announcement of a ceasefire between Iran and Israel on June 23, 2025, calmed markets, leading to a sharp 7% drop in oil prices on June 24.

This decline eased inflation concerns, with Federal Reserve Chair Jerome Powell wrapping up his Capitol Hill testimony, continuing to strike a cautious tone on inflation and trade. He left the door open for future rate cuts if recent pressures prove short-lived.

The sharper than sharper-than-anticipated contraction in the U.S. GDP for Q1 2025 revealed a contraction of 0.5% which may also influence the Federal Reserve’s monetary policy going forward. Meanwhile, the NATO summit in the Netherlands concludes, with the alliance’s 32 member states expected to issue a formal joint statement on hiking their defense spending target from 2% to 5% by 2035.

US-China Trade Deal Finalized

The eurozone’s current account surplus shrank to €19.3 billion in April from €60.1 billion in March, reflecting trade disruptions from U.S. tariffs. On the sidelines, China’s economy sent mixed signals, with retail sales rising 6.4% in May (the strongest since December 2023), though industrial output and fixed-asset investment lagged.

Optimism grew as the U.S. and China finalized a trade deal initially outlined in Geneva, with Commerce Secretary Lutnick indicating additional agreements with 10 key trading partners are forthcoming, potentially easing tariff-related tensions.

Indian Market Recovered After Oil Price Ease

Back home in India, equity markets posted a strong recovery, driven by a combination of easing geopolitical concerns and positive global cues. The benchmark indices reflected growing investor optimism as the ceasefire in the Middle East alleviated fears of supply chain disruptions. Sectorally, banking and automobile stocks led the market gains, benefiting from stable crude oil prices and moderating domestic inflation.

Furthermore, optimism surrounding a potential India-U.S. trade agreement helped bolster investor sentiment. On the flip side, foreign investment in India’s debt market has slowed, impacted by global trade concerns, rising U.S. yields, and a narrowing interest rate differential. From a macroeconomic perspective, India’s outlook remains encouraging.

The HSBC Flash India Composite PMI climbed to a 14-month high of 61.0 in June 2025, up from 59.3 in May. This sharp and broad-based expansion in business activity underscores the resilience of the Indian economy, particularly in the services and manufacturing sectors. The index also signals improving business confidence and strengthening domestic demand.

Future Outlook

Looking ahead, global markets may remain volatile in the short term due to uncertainties surrounding U.S. monetary policy and the upcoming U.S tariff deadline in July. However, India’s economic fundamentals continue to appear robust, with stable macro indicators, supportive policy dynamics, and a positive reform outlook.

Investor sentiment remains constructive, and while near-term challenges persist, the medium-term outlook for Indian equities stays optimistic. So, open Demat account with SMC Global Securities and invest as per your investment objective and risk profile.

Reference:
SMC Global Securities’ Research Team

Author: All Content is verified by SMC Global Securities.