Mixed signals in global markets: tariffs and weak economic data in focus

Global financial markets are trading mixed today amid U.S. President Donald Trump’s announcement of tariffs on drug and semiconductor imports, coupled with weak service sector data impacting investor risk appetite.

The new tariff measures, based on the principle of reciprocity and signed by Trump last week, are set to take effect this Thursday. The President has stated that details regarding tariffs on drug and semiconductor imports will be announced “next week or shortly thereafter.”

“Initially, low tariffs will be applied to imported drugs. However, this rate will rise to 150% within a year to a year and a half, and later increase to 250%, as we want these drugs to be produced domestically in the U.S.,” Trump said.

Analysts note that despite trade agreements with key partners like China, Japan, and the European Union, the new tariff plans are increasing market uncertainty, keeping investor attention focused on related developments.

Economic Outlook
Questions remain over how these tariffs will affect the U.S. economy. The ISM services Purchasing Managers’ Index (PMI) fell to 50.1 in July, below market expectations. Analysts say this weakness raises concerns over economic activity and places the Federal Reserve in a difficult position between controlling inflation and supporting growth.

Meanwhile, the U.S. trade deficit narrowed by 16% in June to $60.2 billion, hitting its lowest level since September 2023. On the corporate front, Palantir shares rose 7.85% after raising its annual revenue forecast, while Pfizer’s shares gained 5.18% following an upward revision to profit guidance.

Gold Continues Fourth Day of Gains
Economic uncertainty in the U.S. has boosted demand for gold. The price of gold rose 0.2% to $3,380 per ounce, marking a fourth consecutive day of gains. However, early trading today shows a slight dip of 0.2% to $3,375 per ounce.

US 10-year Treasury yields climbed to 4.21%, while the dollar index reached 98.7. Brent crude oil prices rose to $67.80 per barrel.

Positive Signals in European and Asian Markets
European stock markets closed higher yesterday, except in France. Investors are closely watching the Bank of England’s interest rate decision scheduled for tomorrow, with markets largely expecting a rate cut.

Asian markets displayed mixed performance. Japan’s automotive sector led gains with Mitsubishi Heavy’s shares up 4.1%, Toyota rising 3.3%, and Mazda Motors increasing 3.1%.

Turkish Markets
The BIST 100 index in Borsa Istanbul closed marginally down at 10,849.96 points yesterday. Meanwhile, August futures contracts on the BIST 30 index in the VIOP market rose 0.35% to 12,303 points during the evening session.

The USD/TRY exchange rate is trading around 40.6780 in the interbank market today.

Key Data Releases to Watch Today:

09:00 Germany – June Factory Orders

12:00 Eurozone – June Retail Sales

14:00 US – Weekly Mortgage Applications

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