Geopolitical Uncertainty and Tariffs Rattle Global Markets:
Global markets are experiencing anxiety and volatility amid escalating geopolitical tensions,
particularly in the Middle East, and continued warnings from Federal Reserve Chair Jerome Powell
Regarding the impact of tariffs and inflation on the U.S. and global economies.
Combined, these factors have weakened financial performance and left investors on edge,
facing unclear signals from monetary policymakers.
Geopolitical uncertainty and tariffs rattle global markets again, making 2025 projections more fragile.

Contents

Tariff Pressures

Asian Tensions

Key Global Corporate Developments

Conclusion

Wall Street Pulls Back Amid Powell’s Warnings and Unclear Policy Outlook

In the United States, stock gains faded after Jerome Powell emphasized
Economic uncertainty from tariffs and inflation complicates the Federal Reserve’s efforts to effectively ease monetary policy.
The S&P 500 index closed below the 6,000-point mark after briefly surpassing it,
while the yield on two-year Treasury bonds nearly erased a previous seven-basis-point drop.
The U.S. dollar remained essentially unchanged.

Fed officials kept interest rates unchanged, signaling two possible cuts in 2025,
alongside lowered growth projections and increased forecasts for inflation and unemployment.
Despite this, several policymakers have revised their outlooks:
Seven now foresee no rate cuts this year (compared to four in March),
While two expect just one cut. Chris Zaccarelli of Northlight Asset Management stated
that the Fed remains in a “wait and see” mode,
watching whether tariffs will push inflation or weaken the labor market.

Asian Markets Slide Amid Escalating Tensions with Iran

Asian markets saw broad declines following a Bloomberg report indicating
that senior U.S. officials are drafting plans for a potential strike on Iran,
fueling concerns about direct U.S. involvement in the Israel-Iran conflict.
The MSCI Asia-Pacific index fell 0.8%, while U.S. stock futures dropped 0.4% during Asian trading hours.
The Australian and New Zealand dollars weakened against the U.S. dollar,
and U.S. Treasury markets were closed for a public holiday.

Sharwee Chanana of Saxo Markets said the reports suggest serious planning,
However, markets remain hesitant to price in a full escalation.
Meanwhile, Kwok Hong Wong of Maybank Securities noted that while the initial reaction was a sharp selloff,

The markets partially recovered.
He added that President Donald Trump’s sudden departure from the G7 summit further deepened uncertainty,
primarily as he had spoken for days about possibly striking Iran.
He later said at the White House that he preferred to make the “final decision at the last moment.”

Tariffs Weigh on Policy and Market Direction

Jerome Powell stated that rising tariffs are likely to push prices higher and could have a lasting inflationary impact,
warning that the final burden may fall on end consumers. Jay Woods of Freedom Capital Markets remarked that the Fed is still hesitant to commit.
At the same time, Seema Shah of Principal Asset Management said the Fed’s decision to maintain

The possibility of a 50-basis-point cut was surprising given inflation risks.
Haris Khurshid of Karobar Capital said Powell “played it safe,”
noting a complex backdrop of slowing growth, persistent inflation, and mounting geopolitical risks.

Geopolitical uncertainty and tariffs rattle global markets into reacting unpredictably,
leading to cautious strategies among institutional investors worldwide.

Asian Tensions and Central Bank Moves

The Japanese yen rose 0.1% against the U.S. dollar,
while the Australian dollar remained weak after surprise job losses in May.
Thailand faces political turmoil after the second-largest party withdrew from Prime Minister Paetongtarn Shinawatra’s coalition.
Taiwan’s central bank is expected to keep interest rates steady for a fifth consecutive quarter,

Meanwhile, the Philippines may move to cut rates.
Central banks in Switzerland, Norway, Turkey, and the United Kingdom
are also due to announce monetary policy decisions later in the day.

Key Global Corporate Developments

U.S. financial regulators plan to cut capital requirements for major banks by 1.5 percentage points
Amid concerns about constrained Treasury market trading.
This applies to JPMorgan Chase, Goldman Sachs, and Morgan Stanley,
all subject to the “enhanced supplementary leverage ratio.”

Japan’s Nippon Steel completed its $14.1 billion acquisition of U.S. Steel after an 18-month negotiation,
backed by President Trump.
In healthcare, Robert F. Kennedy Jr.’s vaccination plan gained momentum as a federal panel prepares
to discuss measles shots for children and vote on a component previously linked to autism.

In technology, Waymo, a subsidiary of Alphabet,
applied to test autonomous taxis in New York despite the lack of local regulation.
Visa and Mastercard stocks fell amid worries over the impact of stablecoins.
Kellanova shares declined after the EU opened an inquiry into Mars’s acquisition of Pop-Tarts and Eggo Waffles.

Ford asked dealers to halt its Mustang Mach-E EV sales in the auto sector
due to a software glitch that could lock passengers inside.
Texas Instruments plans to invest over $60 billion in U.S. semiconductor plants,
which aligns with Trump-era calls for local investment.
Intel unveiled a new engineering leadership team led by CEO Lip-Bu Tan,
with veterans from Cadence Design Systems, Apple, and Google.

In AI, OpenAI ended its partnership with Scale AI shortly after Meta invested billions in the same firm.
Meanwhile, Nike delayed its product launch with Kim Kardashian’s SKIMS brand, which was initially slated for spring.

Conclusion

Geopolitical uncertainty and tariffs rattle global markets in every sector,
from tech to central banks, shaping decisions with each new headline.
Investors and institutions must weigh caution against opportunity in a world of rapid change.

Geopolitical Uncertainty and Tariffs Rattle Global Markets

Geopolitical Uncertainty and Tariffs Rattle Global Markets

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