Global Markets Slip With Tariff Deadline in Focus

By Dow Jones Newswires Staff

Stock markets began a crucial week on the back foot amid elevated uncertainty around President Donald Trump's tariff plans ahead of the July 9 deadline. Trump said he will start sending out letters telling countries what rates they will get on Monday and threatened a 10% additional levy on those aligning themselves with "un-American" BRICS policies. Commerce Secretary Howard Lutnick on Sunday said "tariffs go into effect Aug. 1, but the president is setting the rates, and the deals, right now."

Oil benchmarks were modestly lower after OPEC+ agreed to an outsized output boost over the weekend. Looking ahead, the market will also be eyeing Federal Reserve minutes on Wednesday.

• U.S. futures for the S&P 500 were down 0.5%, Nasdaq futures fell 0.6% and futures for the Dow Jones Industrial Average declined 0.3%.
• In Europe, the Stoxx Europe 600 was just below flat in early trade, mirroring most major stock markets. An exception was Germany's DAX, which climbed 0.4%. The U.K.'s FTSE 100 lost 0.2%.
• In Asia, Japan's Nikkei 225 index closed down 0.6%, Hong Kong's Hang Seng declined 0.4% and China's benchmark Shanghai Composite held steady. South Korea's Kospi bucked the trend, ending up 0.2%.
• The dollar traded steady ahead of Wednesday's deadline to complete trade negotiations. The DXY dollar index against a basket of major currencies recently traded unchanged at 97.166, having hit a three-year low last week of 96.377.
• Two-year U.S. Treasury yields eased while long-end yields were little changed, with larger surprises and prospects for more escalation needed to derail the positive underlying tone in risk sentiment, said Commerzbank Research rate strategist Rainer Guntermann. The two-year Treasury yield eased 2.3 basis points to 3.858%, the 10-year yield was down 0.6 basis point at 4.333%, while the 30-year yield was flat at 4.857%, according to LSEG.
• Oil prices slipped after the Organization of the Petroleum Exporting Countries and its allies agreed to a larger-than-expected production hike for the fourth straight month. In early European trade, Brent crude was down 0.1% to $68.29 a barrel, while WTI fell 0.6% to $66.58 a barrel. Still, Saudi Arabia raised the August price of its flagship Arab Light crude for Asian buyers by $1 a barrel, a sign that Riyadh is confident in the demand outlook.
• Sterling fell, dented by the prospect of tax rises after U.K. Treasury chief Rachel Reeves refused to rule them out in the autumn budget. "We expect the U.K. government's troubles to remain a theme through the coming week, weighing on the pound," Monex Europe analyst Nick Rees said. Sterling was down 0.3% to $1.3605 in early trade.

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