US Market Surge While India Records Lower Inflation

In the week gone by, global equity markets trended higher, buoyed by strong U.S. economic data, better-than-expected corporate earnings, and easing inflationary pressures. The U.S. market was a key driver, with the S&P 500 and Nasdaq Composite closing at record highs. In this blog, we’ll know in detail what happened last week (July 14, 2025 to July 18, 2025) all across the globe.

US Market Rally on Back of Positive Corporate Signals

The S&P 500 gained 0.5%, while the tech-heavy Nasdaq rose 0.7%, fueled by stellar quarterly results from major corporations. According to FactSet, around 50 S&P 500 companies had reported earnings by midweek, with nearly 88% surpassing analyst expectations, reflecting strong business fundamentals and resilient consumer demand.

Economic indicators added to investor optimism: U.S. retail sales rose 0.6% in June, well above the forecasted 0.2%, and weekly jobless claims fell to 221,000-signaling strength in the labor market. Despite these positives, concerns over trade tensions loomed, particularly in Europe, where stock markets came under pressure.

European Market Faced 30% Tariff Heat

Investors reacted sharply to renewed tariff threats by U.S. President Donald Trump, who proposed a 30% levy on EU and Mexican imports from August 1. As a result, major European indices fell as EU ministers prepared potential retaliatory measures on U.S. goods worth €100 billion.

While European stocks faced volatility, the U.K. market posted modest gains, supported by encouraging corporate results and labor market data that suggested slower-than-expected cooling. U.K. inflation edged up to 3.6%, but traders continued to price in a high probability of a Bank of England rate cut in August, focusing more on the softening job market.

China Market Remained Stable

In Asia, Chinese equities were relatively stable after GDP data showed 5.2% year-on-year growth in Q2, slightly ahead of expectations but slower than Q1’s 5.4% expansion. The figures reflected ongoing challenges in China’s economy, including deflation and a prolonged property sector slump, though the marginal beat reassured markets.

Meanwhile, Japan’s export-driven economy showed signs of strain. Exports declined for the second consecutive month in June, down 0.5% year-on-year, exacerbating concerns amid the absence of a breakthrough in trade negotiations with the U.S. Economists had expected a modest rise in exports, making the decline more concerning and raising fears of a potential recession.

India’s Retail Inflation at 6-Year Low

Back at home, the Indian stock market traded in a narrow range, reflecting a cautious undertone despite a positive macroeconomic surprise. While headline indices like the Sensex and Nifty posted modest gains mid-week, overall momentum remained subdued due to mixed global cues.

Investors digested inflation data, corporate earnings, and global central bank signals, resulting in a tug-of-war between optimism on monetary policy and anxiety about the underlying economic environment. A key driver for the week was the sharp decline in India’s retail inflation (CPI), which fell to a six-year low, driven by a broad-based moderation in food and fuel prices.

Wholesale inflation (WPI) also showed a softening trend, reinforcing expectations that the Reserve Bank of India (RBI) could opt for another rate cut in the upcoming monetary policy meetings. These inflation figures lifted market sentiment mid-week and supported rate-sensitive sectors such as banking, real estate, and consumer discretionary.

Future Outlook

Looking ahead, the Indian stock market is likely to remain rangebound with focus shifting to Q1 FY26 earnings and RBI policy expectations. Global cues, including U.S. Fed signals and FII flows, will continue to influence market sentiment. So, open Demat account with SMC Global Securities and invest as per your investment objective and risk profile.

Reference:
SMC Global Securities’ Research Team

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