Uncertain Tariff Outlook Leaves U.S. Stocks Mixed

Market Overview

On Tuesday, U.S. equity markets ended mixed as tariff uncertainty weighed on sentiment. Small-cap stocks outperformed, while the Dow Jones Industrial Average lagged behind. In the bond market, Treasury yields extended gains for a second day, with long-dated yields leading the move. Notably, the 30-year yield rose 4 basis points. A rare development saw the 20-year Treasury yield surpass the 30-year yield for the first time in nearly four years.

Commodities experienced heightened volatility. NY copper prices surged over 18% intraday from the session low after Donald Trump proposed a 50% tariff on copper. Gold prices dropped 1.1%, briefly dipping below $3,300 per ounce. Oil prices climbed to a two-week high, driven by a combination of factors: falling U.S. production forecasts, renewed Houthi attacks in the Red Sea, concerns over potential copper tariffs, and technical short-covering.

Market Highlights – What to Watch

● U.S. 1-Year Inflation Expectations Hit 5-Month Low

According to the New York Fed‘s monthly survey released Tuesday, consumer expectations for inflation over the next year fell for a second consecutive month to 3.0%, the lowest since January—before Trump’s announcement of sweeping tariffs. Expectations for three-year and five-year inflation remained unchanged at 3.0% and 2.6%, respectively.

● Trump Threatens 50% Tariff on Copper, 200% on Pharmaceuticals

Trump stated that pharmaceutical companies would be given at least one year to repatriate their supply chains to the U.S. No timeline or rate was disclosed for potential semiconductor tariffs. According to the Commerce Secretary, the copper tariff is expected to take effect in late July or by August 1. Investigations into the pharmaceutical and semiconductor sectors are expected to conclude by the end of the month. NY copper futures spiked as much as 17% and ended the day up 13%, marking a new all-time high.

Key Data to Watch

• 22:00 GMT+8 – U.S. May Wholesale Sales MoM

• 23:30 GMT+8 – U.S. Weekly EIA Crude Oil Inventories (ending July 4)

• 01:00 GMT+8 – U.S. 10-Year Treasury Auction Yield (as of July 9)

• 02:00 GMT+8 – Federal Reserve FOMC Meeting Minutes Release