Tariff Progress Accelerates, Dollar Weakens Further

Market Overview

The market traded under the influence of two major themes yesterday: the upcoming earnings season for big tech and developments in global trade policy. The Nasdaq snapped its seven-day winning streak, pressured by declines in semiconductor and AI-related mega-cap stocks. Despite the tech slump, the S&P 500 edged higher to another record close, supported by gains in non-tech sectors such as healthcare and homebuilding.

In the bond market, U.S. Treasury yields broadly declined, with the 10-year yield down nearly 3 basis points. The dollar weakened for the third straight session, shedding close to 0.5%. Meanwhile, Bitcoin surged 2.3%, briefly reclaiming the $120,000 mark. Gold jumped 1% to close at $3,431.59 per ounce, its highest level since June 16. WTI crude dipped slightly to $66.74 per barrel. Looking ahead, investors will closely monitor the upcoming earnings from major tech firms and further updates on trade tariffs.

Market Watch Ahead

● Trump: “U.S. and Japan Reach Trade Deal”

After eight rounds of negotiations, the U.S. and Japan have finalized a trade agreement. President Trump announced via social media that tariffs on Japanese imports would be set at 15%, and Japan will commit $550 billion in investments in the U.S. The deal includes opening Japans markets to U.S. exports such as automobiles, trucks, rice, and select agricultural products. The U.S. is expected to gain 90% of the profits from this trade pact. As customary, the White House may take several days or even weeks to release the full details. The Japanese yen initially plunged on the news, but USD/JPY later reversed course and rose as much as 0.3% to 146.25 at the time of writing.

● Malaysia Seeks 20% Tariff Cap

Malaysia‘s negotiation team is pushing for a tariff rate closer to 20%, below the standard 25%, aiming for parity with regional peers like Indonesia and Vietnam. However, Malaysia has shown reluctance to agree to U.S. demands such as extending EV tax exemptions, relaxing foreign ownership limits, and cutting fisheries subsidies. Prime Minister Anwar Ibrahim drew a clear line on issues tied to domestic policy, particularly protections for ethnic Malays and indigenous groups. The outcome of the talks will directly impact Malaysia’s economic growth outlook, with the government previously stating that its 4.5%–5.5% GDP growth target hinges on the final tariff terms.

Key Economic Events to Watch

🕙 22:00 GMT+8 – U.S. Existing Home Sales (June, annualized, million units)

🕥 22:30 GMT+8 – U.S. EIA Weekly Crude Oil Inventories (as of July 18, in thousand barrels)