Tariffs expand, Ukraine security talks, markets steady

Markets opened today navigating a combination of trade policy shifts, geopolitical developments, and corporate earnings. While US futures hold steady near record levels, global risk sentiment is shaped by expanding US tariffs, renewed security talks for Ukraine, and expectations ahead of the Federal Reserve’s Jackson Hole gathering.

United States: Stocks, earnings, and tariff impact

US stock futures were broadly steady as investors prepared for a key week of retail earnings. Contracts on the S&P 500, Nasdaq 100, and Dow Jones were little changed, while European equities advanced modestly on optimism about a potential Ukraine peace framework.

Retailers are in focus, with Home Depot reporting today, followed by Target and Walmart. These earnings will give markets a read on how US consumers are navigating higher borrowing costs and Trump’s widening tariffs. The administration has now extended its steel and aluminum duties to cover more than 400 consumer items, ranging from motorcycles and auto parts to baby gear and tableware. The sudden rollout created compliance and logistics challenges for importers and could raise costs across multiple industries.

Bond markets showed modest strength, with 10-year US Treasury yields at 4.34% after S&P affirmed the US’s AA+ credit rating. The dollar was steady against peers, and spot gold rose slightly to $3,338 an ounce.

Geopolitics: Ukraine security guarantees

In Washington, US and European officials began immediate work on a security package for Ukraine following President Trump’s meeting with President Zelenskiy and European leaders. The goal is to establish NATO-style guarantees without granting Ukraine full membership, allowing Kyiv to maintain troop levels without Russian-imposed restrictions.

The guarantees are expected to involve both US coordination and heavy European involvement, with the possibility of a multinational force in the future. While Trump emphasized that Europe will carry much of the financial and logistical burden, the US has pledged support. Still, risks remain: Russia rejected the idea of NATO troops on Ukrainian soil, and Moscow continues to demand territorial concessions in Donbas.

Markets will closely watch whether talks between Trump and Putin lead to a trilateral summit that includes Zelenskiy. For now, optimism over security commitments has supported European equities and boosted broader market sentiment.

Trade policy: Expanded tariffs

Trump’s decision to broaden metals tariffs represents one of the most significant trade policy escalations this year. By targeting derivative products and consumer goods, the tariffs now cover an estimated $328 billion worth of imports — a sixfold increase from the original 2018 measures.

The abrupt implementation, with no exemptions for goods in transit, caught importers off guard. The inclusion of items such as auto components, furniture parts, personal care products, and cargo equipment means the impact will ripple far beyond heavy industry. While US steel producers welcomed the move, small and mid-sized importers warned of unsustainable compliance costs and potential consumer price increases.

With copper tariffs also being prepared, markets anticipate further disruption in supply chains and cost structures across industries.

Federal Reserve: Jackson Hole ahead

Attention is turning to the Federal Reserve’s annual Jackson Hole symposium, where Chair Jerome Powell will outline a new policy framework on inflation and employment later this week. Markets currently price in a first rate cut in September, with another move before year-end, as weakening labor data outweighs inflation concerns.

The Fed’s tone will be key for risk assets, especially given seasonally weaker equity performance between August and October and the recent climb in long-term yields.

Commodities: Oil and metals

Oil extended its monthly decline, with Brent crude falling below $66 a barrel. Traders are weighing the potential for easing restrictions on Russian crude exports as part of peace discussions, though Moscow would remain reliant on Asian buyers. Gold edged higher on safe-haven demand, supported by geopolitical uncertainty.

Corporate highlights

• Intel rose sharply after reports that the Trump administration is considering taking a 10% stake, while SoftBank also announced a $2 billion purchase.
• BHP Group posted a drop in annual profit as weaker Chinese demand hit iron ore and coal.
• Nvidia is working on a China-specific AI chip, while Apple is expanding iPhone production in India to reduce reliance on China.
• Tesla priced its updated Model Y competitively in China as it fights for market share.

Markets remain near record highs, but the combination of expanded tariffs, fragile Ukraine negotiations, and Fed policy uncertainty creates a delicate balance. Investors should watch US retail earnings for signals on consumer resilience and monitor geopolitical headlines for shifts in sentiment.

Prepared by Nour Hammoury, Chief Market Analyst at SquaredFinancial
Nour is an investor, independent market strategist, and financial advisor. He holds a BA in Finance and Banking Science from Al-Ahliyya Amman University and a CFTe in Economics from the International Federation of Technical Analysts. He has more than 15 years of experience in forex, stocks, and global economic developments, as well as central bank policies and intermarket analysis. He appears regularly on major international TV networks, such as BBC, Al-Jazeera, Al Hurra, CNBC, and Bloomberg, holding open discussions and sharing insights and readings of the markets and trends.

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