Global stock markets moved in mixed directions Tuesday as a rise in U.S. inflation raised concerns that President Donald Trump’s tariffs may be starting to ripple through the American economy.
Wall Street mostly gained ground, lifted by strong earnings from major banks and optimism in the tech sector. The S&P 500 and Nasdaq Composite both advanced, while the Dow Jones Industrial Average lagged.
Asian indices largely posted gains, but European markets slipped into negative territory by late trade.
The U.S. consumer price index rose 2.7% in June compared to a year earlier, in line with economists’ expectations.
"The CPI release showed some early signs of tariff pass-through but underlying inflation remains muted," said Stephen Innes, managing partner at SPI Asset Management.
While inflation remained relatively subdued, analysts said businesses were still working through stockpiles built up ahead of tariff implementation, meaning additional price increases could follow later this year.
Since April, the United States has imposed a 10% baseline tariff on goods from most trading partners, with steeper duties targeting steel, aluminum and automobiles. Trump has warned that starting Aug. 1, the U.S. will impose 30% tariffs on European Union and Mexican goods unless new trade agreements are reached.
The Federal Reserve, which aims for 2% inflation, could consider cutting interest rates in September. But that move could be off the table if tariffs begin to hamper broader U.S. economic growth.
In China, GDP growth figures met expectations, driven largely by a surge in exports between April and June as businesses sought to get ahead of the U.S. tariffs.
Trump added more tension to global markets Monday, warning of potential tariffs of up to 100% on countries trading with Russia — including China — if Moscow does not end its war in Ukraine within 50 days.
Despite Russia’s key role as a crude oil supplier, oil prices fell following Trump’s remarks and continued lower Tuesday.
"Investors seem convinced that the 50-day window gives the US, Russia and Ukraine an opportunity to hammer out some kind of deal," said David Morrison, senior market analyst at Trade Nation.
OPEC, in its latest monthly market report, maintained its production forecast for this year and next, despite growing uncertainties tied to the U.S.-led tariff standoff.
The organization projected oil demand would increase by 1.3 million barrels per day in both 2025 and 2026.
"Continued robust global economic growth is expected... despite ongoing US-centred trade challenges and geopolitical uncertainties," the report stated.
U.S. banking giants JPMorgan Chase and Wells Fargo reported better-than-expected second-quarter results.
JPMorgan CEO Jamie Dimon described the U.S. economy as "resilient" while facing "significant risks," including trade uncertainty related to tariffs.
Tech heavyweight Nvidia also lifted sentiment after saying it would be allowed to resume sales of its H20 artificial intelligence chips to China following a partial easing of U.S. export restrictions. The announcement helped fuel a rally on the Nasdaq, which closed at a record high Monday.
Meanwhile, Bitcoin pulled back Tuesday as investors appeared to lock in profits after the cryptocurrency hit a new all-time high above $123,200 on Monday, buoyed by optimism surrounding potential regulatory changes in the U.S.
New York:
Dow: DOWN 0.3% at 44,329.45
S&P 500: UP 0.2% at 6,283.26
Nasdaq Composite: UP 0.7% at 20,790.24
Europe:
London – FTSE 100: DOWN 0.2% at 8,979.87
Paris – CAC 40: DOWN 0.2% at 7,791.87
Frankfurt – DAX: DOWN 0.1% at 24,134.73
Asia:
Tokyo – Nikkei 225: UP 0.6% at 39,678.02 (close)
Hong Kong – Hang Seng Index: UP 1.6% at 24,590.12 (close)
Shanghai – Composite: DOWN 0.4% at 3,505.00 (close)
Euro/Dollar: DOWN at $1.1644 from $1.1670
Pound/Dollar: DOWN at $1.3408 from $1.3428
Dollar/Yen: UP at 148.55 yen from 147.77 yen
Euro/Pound: DOWN at 86.86 pence from 86.88 pence
Brent Crude: DOWN 0.3% at $69.00 per barrel
West Texas Intermediate: DOWN 0.5% at $66.64 per barrel