Trump announces 50% tariff on copper imports

General market commentary

US equity markets ended Tuesday on a mixed note, as investor sentiment remained cautious amid renewed trade tensions. The S&P 500 dipped slightly by 0.07%, while the Dow Jones Industrial Average fell 0.37%, and the tech-heavy Nasdaq was broadly flat, gaining just 0.03%. Small-cap equities outperformed, with the Russell 2000 rising 0.66%, reflecting investor rotation amid uncertainty. While large-cap indices wavered between gains and losses throughout the day, the broader tone was subdued, as markets awaited further clarity on US trade policy following President Trump's latest round of tariff threats. Copper futures surged nearly 10% to record highs, after the administration proposed a 50% tariff on copper imports, signalling an intensifying stance on trade. Meanwhile, US Treasuries trimmed earlier losses to end the session with yields broadly unchanged, and oil prices rose 0.5%. The dollar strengthened 0.4% on a trade-weighted basis.

Investor focus has shifted sharply back to trade developments, with Trump's threats of steep tariffs on copper, semiconductors, and pharmaceuticals reigniting fears of a broader global trade war. While markets have thus far remained relatively resilient, holding near record highs, volatility could rise over the summer, particularly if trade negotiations falter ahead of the 1 August deadline. The cautious tone was underscored by the latest NFIB small business sentiment survey, which showed a slight decline in confidence and an increase in inflation expectations, largely attributed to higher input costs from tariffs. Nonetheless, economists expect the economic impact to slow growth rather than derail it entirely. With a quiet macroeconomic calendar this week, attention now turns to the release of the Fed’s June meeting minutes and Thursday’s jobless claims for further guidance on monetary policy.

Latest market and economic update

Asian equities traded mostly flat to lower on Wednesday as uncertainty over US tariff plans weighed on sentiment. China shares were muted despite mixed inflation data, while Hong Kong's Hang Seng fell 0.9%. Japan and South Korea posted modest gains. Australian equities declined after the RBA held rates steady and copper tariff concerns hit mining shares.

US equity futures were little changed overnight as investors digested President Trump’s latest tariff measures, including a 50% duty on copper imports and potential 200% tariffs on pharmaceuticals. Markets showed limited reaction, reflecting a wait-and-see approach amid trade uncertainty. Sector-specific levies remain a key concern as investors await further policy clarity.

European equities closed higher on Tuesday as investors welcomed the EU’s exclusion from new US tariffs. The Eurozone’s STOXX 50 rose 0.5%, while the STOXX 600 gained 0.4%. Autos outperformed, with BMW and Stellantis benefiting from tariff pressure on Asian rivals. UniCredit and Novo Nordisk also advanced on deal optimism and sector-specific strength.

The US dollar extended its gains this morning, with the dollar index rising above 97.5 as markets digested President Trump’s latest tariff announcements. The greenback strengthened notably against the yen and held firm against the euro, which was trading at 1.1707. Investors now await the FOMC minutes for further direction on US monetary policy.

Oil prices eased slightly on Wednesday in Asian trading, retreating from two-week highs after U.S. crude inventories unexpectedly surged by 7.1 million barrels, raising concerns over demand. Brent slipped 0.3% to $69.91 and WTI fell 0.4% to $68.10. Caution also prevailed as investors awaited further trade tariff announcements from President Trump.

President Trump announced plans for a 50% tariff on copper to boost US production, causing copper futures to surge over 12%. The tariff, expected by late July or August 1, aims to reduce reliance on imports from Chile, Canada, and Mexico. Industry groups await details, while concerns rise over potential economic impacts and supply chain disruptions.

China’s consumer inflation rose slightly by 0.1% year-on-year in June, supported by government subsidies and e-commerce events, though it fell 0.1% month-on-month. However, producer prices dropped 3.6%, marking a 33rd straight month of contraction and the steepest fall since July 2023, highlighting persistent deflationary pressures amid weak demand and ongoing trade tariff headwinds.

White House economic adviser Kevin Hassett is emerging as a leading contender to succeed Jerome Powell as Federal Reserve Chair, the Wall Street Journal reported. Favoured over Kevin Warsh, Hassett met Trump twice in June. Trump’s criticism of Powell’s rate policies has raised concerns over Fed independence ahead of Powell’s term expiry in May 2026.

Equities on the move

The following companies experienced moves in their share price driven by analyst ratings, quarterly earnings, or other news:

UniCredit boosted its stake in Commerzbank to around 20% by converting derivatives, aiming to strengthen its position despite German opposition, with plans to reach 29%. Meanwhile, shares in UniCredit and Banco BPM rose on Tuesday after reports the EU will order Italy to drop conditions on their takeover deal, asserting Brussels alone can set merger terms.

Meta Platforms has acquired nearly a 3% stake in eyewear maker EssilorLuxottica, investing around €3 billion, with plans to potentially increase its share to 5%. This move supports Meta’s expansion into AI-powered wearable tech, including the recently launched Oakley Meta HSTN smart glasses, enhancing its AI infrastructure and user engagement.

Novo Nordisk has submitted an application to the European Medicines Agency for approval of a higher 7.2 mg dose of its obesity treatment Wegovy. Clinical trials showed the new dose delivers significant weight loss with a similar safety profile. The company plans broad EU availability, enhancing its expanding obesity treatment portfolio.

Super Micro Computer plans to boost investment and expand AI server manufacturing in Europe, driven by rising demand, CEO Charles Liang said. The company, which uses Nvidia chips for AI infrastructure, currently has facilities in the Netherlands but may build more across the region. Shares have rebounded 63% in 2025 after earlier financial concerns.

Solar and alternative energy shares fell sharply yesterday after President Trump signed an executive order ending most government support for the sector. Major firms like First Solar, Next Era Energy, and Enphase Energy dropped between 3% and 7%, citing concerns over reliance on foreign-controlled supply chains. The order follows earlier measures boosting US oil and gas.

Ryanair’s CEO Michael O’Leary reported strong summer travel demand and rising ticket prices despite Europe’s heatwave. The airline expects to recover most of last year’s fare decline and anticipates Q1 profits to double. Ryanair plans to treble passengers at Warsaw’s Modlin airport by 2030, investing $400 million and expanding its fleet there.

SpaceX is in talks to raise new capital and sell insider shares, potentially valuing the company at about $400 billion, up from $350 billion during its December share buyback. This would place Elon Musk’s privately held rocket and satellite company in the same valuation league as major public firms like Home Depot and Palantir Technologies.

Bank of America raised Uber’s price target to $115, citing driver tax savings, accelerating bookings, and growing autonomous vehicle momentum. The tax break for gig workers could boost driver income by 2.5%. Uber-backed Moove’s $1.2bn AV financing and strong bookings growth further support optimism, with multiple AV partnerships and increasing subscriber retention.

Bernstein and Jefferies raised Oracle’s price targets to $269 and $270, citing strong cloud momentum and a pivotal $30 billion FY28 contract. They highlighted growth from OCI Gen II, AI, and Strategic Back Office, with Oracle’s AI infrastructure deal with OpenAI validating its strategy. Both see Oracle’s revenue growth as de-risked and accelerating.

Wells Fargo downgraded KLA to Equal Weight from Overweight, citing valuation concerns and limited upside for 2026 despite strong year-to-date gains. The bank lowered its wafer fab equipment forecast, highlighting slower growth for leading-edge fabs. While KLA remains defensive, growth challenges and valuation risks may weigh on performance next year.

Jefferies views Renault shares as cheap but sees a complex re-rating ahead amid CEO transition and strategic uncertainty. Despite better-than-expected H1 results and improved margin forecasts, cash flow pressures persist. The recent Nissan stake reclassification highlights alliance challenges, while potential share swaps and buybacks could impact valuation. Jefferies maintains a Hold rating.

Bank of America raised its S&P 500 year-end target to 6,300 and set a 12-month target of 6,600, citing strong corporate resilience despite macroeconomic uncertainty. Lower equity risk premium offsets high sovereign yields. The bank favours equities over bonds, expecting dividends to contribute more, while highlighting risks but a brighter long-term outlook.

Upcoming data and events

Today’s key releases include the Federal Reserve’s meeting minutes, revealing policy outlook and rate expectations, and the Energy Information Administration’s crude oil inventory report, which may influence oil prices and market sentiment.

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