Global Markets Rise as Tech Stocks Rally Despite Tariff Fears: Global equity indices in Asia and the U.S. climbed,
Investors largely brushed off President Donald Trump’s threats to impose 100% tariffs on semiconductor imports.
The rally was driven by optimism surrounding a potential Federal Reserve interest rate cut and substantial gains in major tech stocks.

Contents

Stocks Rebound

Tariff Exemptions
The Federal Reserve

Corporate Earnings
Signs of Overenthusiasm

Trade and Geopolitical Escalation

U.S. Bond Auctions

Asian and U.S. Stocks Rebound

The MSCI Asia Index rose by 0.9%, while futures on the S&P 500 and Nasdaq 100 climbed 0.3% during Asian trading.
>On Wall Street, the S&P 500 added nearly 1%, while the Nasdaq 100 surged 1.3%,
fueled by a 5.1% jump in Apple’s stock after announcing a $100 billion investment in U.S.-based manufacturing to avoid potential tariffs on iPhones.

Global chipmakers also gained: Nvidia rose in after-hours trading, Samsung Electronics added 2.6% in Seoul, and TSMC surged nearly 5% in Taiwan.

Tariff Exemptions Reassure Markets

Despite Trump’s aggressive tone, his announcement of exemptions for companies repatriating production to the U.S. helped calm market fears.
He also confirmed that smartphones, computers, and monitors will be exempt from the upcoming reciprocal tariffs, which are set for Thursday.
Taiwan and South Korea confirmed that TSMC, Samsung Electronics, and SK Hynix would be exempt.

Morgan Stanley analysts, including Joseph Moore, wrote, “100% tariffs are not ideal,
but if companies are given time to relocate production, the actual damage may be limited.”

Billy Leung of Global X ETFs noted, “Trump’s move is unlikely to disrupt major supply chains,
especially since there is no formal executive order yet.”

The Fed and Monetary Policy Outlook

Short-term U.S. Treasury yields declined, with the 2-year yield falling 3 basis points to 3.70%,
while the 10-year yield held steady at 4.22%—signaling growing expectations of a Fed rate cut.

Mary Daly, President of the San Francisco Fed, said policymakers would likely
need to adjust rates soon to prevent further labor market weakening.
Neel Kashkari, of the Minneapolis Fed, agreed, noting that the current economic slowdown makes a rate cut “appropriate in the near term.”

The Fed held rates steady in July.
Its next meeting is set for September, and two more are scheduled for 2025.

Corporate Earnings Take Center Stage

José Torres from Interactive Brokers noted a “clear risk-on tone,”
as investors shift focus from volatile trade headlines and weak economic data to strong corporate earnings.

Sandy Villere of Villere & Co. added: “Noise from Washington isn’t bothering investors much anymore — the spotlight is on results.”

Brett Kenwell of eToro echoed, “Despite macro or seasonal headwinds,
Market pullbacks are now seen as buying opportunities.”

A Goldman Sachs memo warned that betting against the bullish trend “borders on irrationality.”
Analyst Paolo Schiavoni wrote, “Markets are unable to look far enough ahead, which is why recession risks are being ignored.”

Signs of Overenthusiasm

Last month, the Bloomberg Intelligence Market Pulse Index fell into “euphoric” territory,
indicating overheated investor sentiment. Historically, such levels are followed by weaker returns over the next three months.

Mark Haefele of UBS Global Wealth Management said the current environment warrants short-term hedging for cautious investors.
At the same time, those below their target allocations should prepare to increase equity exposure on dips.

Trade and Geopolitical Escalation Led by Trump

President Trump announced plans to meet with Vladimir Putin and Volodymyr Zelenskyy next week
in a renewed push for peace between Russia and Ukraine.

On the trade front, the U.S. imposed an additional 25% tariff on Indian goods,
doubling the previous rate due to India’s continued purchases of Russian energy.

Anna Wu from VanEck said India was “caught between a rock and a hard place,” with both stocks and the rupee under pressure.

Meanwhile, the Swiss president left Washington without any breakthrough on the 39% tariffs imposed by Trump.

U.S. Bond Auctions and Japanese Speculation

Markets are also eyeing a 30-year Treasury auction on Thursday, with caution after July’s smooth sale.
Uncertainty is rising over Japanese Prime Minister Shigeru Ishiba’s possible resignation, adding further complexity to the Asian landscape.

Global Markets Rise as Tech Stocks Rally Despite Tariff Fears

Global Markets Rise as Tech Stocks Rally Despite Tariff Fears

Related Topics