#TrumpTariffs

Today's Financial Markets News (August 3, 2025)

Global Markets Overview

U.S. stocks ended last week with losses: The Dow Jones Industrial Average fell about 3%, while the S&P 500 and Nasdaq Composite each dropped over 2%. This downtrend comes despite markets being near historic highs, with worries about rising tariffs and softer labor market data adding pressure. Investors remain cautious as the Federal Reserve kept rates unchanged and adopts a wait-and-see stance until at least September.

Tariffs in focus: President Trump's recent executive order introduced new "reciprocal" tariffs ranging from 10% to 25% on various countries. The effective average U.S. tariff rate now stands between 15% and 20%, notably higher than earlier expectations. Ongoing U.S.-China trade negotiations and tariffs on rare earths and tech inputs remain key market risks.

Earnings season: Out of 331 S&P 500 companies that have reported so far, over 82% surpassed expectations. The S&P's Q2 blended earnings growth rate is now 10.2%, double the forecast from June. Reports from companies like Palantir, AMD, Walt Disney, and Caterpillar are scheduled in the coming days.

Indian Market Highlights

Nifty 50 and Sensex both declined: The Nifty fell 0.82% to 24,565.35 and the Sensex lost 0.72% to 80,599.91 on Friday (August 1), marking their fifth consecutive weekly loss— the longest such streak in two years. This week, focus is on rate decisions from the Reserve Bank of India, with rising market bets on a 25 basis point rate cut.

Dollar strength and FII outflows: The dollar index surged, causing pressure on emerging market assets as foreign institutional investors pulled more than ₹27,000 crore from Indian equities over the past nine trading sessions. Short positions in Indian index futures are at their highest since March 2023.

Trade developments: U.S. tariffs on Indian goods were raised to 25%, sparking concerns about global protectionism. However, India is expected to maintain its oil imports from Russia, despite U.S. threats of further penalties.