Uncertainty Deepens in Markets Amid Tariffs and Inflation (July 2025)

Uncertainty Deepens in Markets Amid Tariffs and Inflation (July 2025)

 

As of July 2025, global markets continue to experience fluctuations. Inflation data released in the U.S. and the emerging effects of tariffs have made it more difficult for investors to determine direction. Expectations regarding the Federal Reserve’s (Fed) interest rate decisions remain uncertain in line with these developments.

 

 

 

U.S. Inflation Surpasses Expectations

 

In June, the U.S. Consumer Price Index (CPI) rose by 0.3% monthly, in line with expectations, and by 2.7% annually, exceeding forecasts. This marks the highest level since January on a monthly basis and since February on a yearly basis.

Core inflation, which excludes volatile food and energy prices, rose by 0.2% monthly and 2.9% annually—indicating a modest increase. These results strengthen the forecast that the Fed may remain cautious on rate cuts.

 

 

 

Expectations for Fed Rate Cuts Weaken

 

While the full inflationary effect of tariffs is expected to emerge in the fourth quarter, the latest data suggests that the Fed is less likely to cut rates in September. However, markets still anticipate two rate cuts by the end of the year.

 

 

 

U.S. Bond Yields and Dollar Index Rise

 

The yield on 10-year U.S. Treasury bonds increased to 4.49%, signaling continued inflationary pressures. Meanwhile, the U.S. Dollar Index climbed to 98.6, nearing the 99 level, which pressured gold prices. The price of gold fell to $3,325 per ounce before recovering slightly to around $3,337.

 

 

 

Mixed Performance in U.S. Stock Markets

 

U.S. stock markets showed mixed performance:

·         S&P 500: ↓ 0.4%

·         Dow Jones: ↓ 0.98%

·         Nasdaq: ↑ 0.18%

Nvidia announced it would continue selling chips to China, boosting its stock by 4% and supporting tech sector gains.

 

 

 

Developments in European and Asian Markets

 

European markets turned downward due to concerns about the economic impact of U.S. tariffs, with Eurozone trade balance data drawing attention.

Asian markets showed mixed results:

·         Japan Nikkei 225: ↑ 0.5%

·         Hong Kong Hang Seng: ↑ 0.4%

·         South Korea Kospi: ↓ 0.8%

·         China Shanghai Composite: ↓ 0.1%

Nvidia’s plan to resume chip shipments to China also supported tech stocks across the region.

 

 

 

Latest Situation in Turkish Markets

 

Due to the July 15 national holiday, Borsa Istanbul was closed. On Monday, the BIST 100 index closed at 10,225 points, down 1.28%. The USD/TRY exchange rate hovered around 40.20, showing little movement.

 

 

 

Conclusion: Uncertainty Persists, Markets Stay Cautious

 

The delayed impact of U.S. tariffs is gradually being reflected in inflation figures. The Fed’s rate decisions will likely depend on upcoming data releases. While the strengthening dollar pressures commodities and gold, technology stocks are showing resilience.

Investors are expected to focus on upcoming U.S. PPI, Beige Book, and employment data.

 

 

 

 Tags:

inflation 2025, Fed rate decision, US dollar index, gold prices, Borsa Istanbul, tariff impact, Nvidia chip sales, global markets, Eurozone trade balance, Beige Book report

 

 

 

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