Uncertainty remains despite tariff pause

Global financial markets kicked off the week with renewed momentum as a mix of geopolitical developments, policy signals, and macro trends continued to reshape investor sentiment.

Temporary pause in tech tariffs sparks market rebound

Equity markets rallied globally after President Trump temporarily suspended tariffs on a range of consumer electronics, including smartphones and laptops. The move offered some relief after a turbulent period of trade uncertainty. Major indices in Europe climbed more than 2%, while S&P 500 and Nasdaq futures both advanced over 1%.

However, this reprieve may be short-lived. The White House confirmed that the exemption is procedural, and that a new, more targeted tariff regime will soon be introduced for the tech sector—particularly semiconductors. Trump reaffirmed that no product is permanently spared and emphasized a focus on reshoring production across the electronics supply chain.

This mixed message—relief now, pressure later—has kept markets cautious even amid the short-term bounce.

Dollar slide signals deeper investor anxiety

Despite the equity bounce, the US dollar continued its losing streak, falling to a six-month low. This persistent weakness in the greenback is being interpreted by markets as a loss of confidence in the U.S.’s policy direction. The dollar’s traditional role as a safe-haven asset is being challenged, particularly as U.S. Treasuries also face selling pressure.

Investors appear increasingly sceptical of the U.S. policy mix, with many questioning the long-term credibility of American assets in the face of unpredictable tariff decisions and growing geopolitical friction.

Gold demand surges in China amid trade uncertainty

In response to heightened market stress, China’s central bank has quietly authorized additional gold import quotas for local banks. This move aims to accommodate the surge in domestic demand from both institutions and retail investors seeking refuge in safe-haven assets.

Gold prices have soared more than 6% over the past week, reaching another record high above $3,240 per ounce. The People’s Bank of China also appears to be encouraging broader gold ownership, including through pilot programs allowing insurance firms to invest in bullion.

This reinforces China’s strategic intent to diversify away from dollar-based assets and highlights the global pivot toward hard assets amid monetary and trade volatility.

Sector outlook: Tariffs to target semiconductors next

While many electronics products are enjoying a brief exemption, the semiconductor industry is next in line for specific tariffs under Section 232. The administration is expected to announce formal steps within weeks, signaling higher levies on chips and chip-dependent products such as smartphones and tablets.

The implications could be far-reaching: not only would this increase production costs for U.S. tech companies, but it also risks further disrupting global supply chains already under strain from prior tariff rounds and post-pandemic imbalances.

Broader economic risks still loom

Despite market gains, underlying concerns persist. Large U.S. banks are revising down their 2025 earnings forecasts, citing the impact of higher input costs and slowing global growth. Meanwhile, volatility remains elevated as investors brace for more policy reversals.

In the bond market, yields on U.S., German, and UK sovereign debt declined slightly, suggesting a cautious stance by investors even as stocks rallied. Oil prices held steady, but headwinds remain due to projected global surpluses and softer demand expectations.

While markets welcomed the temporary suspension of electronics tariffs, the underlying policy outlook remains fluid and contentious. With more sector-specific tariffs looming and confidence in traditional safe havens like the dollar under pressure, investors are navigating a highly uncertain landscape. As always, positioning for flexibility and risk management will be critical in the days ahead.

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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