Fresh US Tariffs and Geopolitics Keep Investors on Edge

GLOBAL MOOD: Risk-off
Drivers: US Tariff Expansion, Ukraine-Russia Conflict

Markets are leaning risk-off after Trump slapped tariffs on another $200 billion of imports, stoking fresh trade worries. Hopes for Ukraine peace dimmed as Russia launched new airstrikes, even with US security pledges. Mixed US housing data kept investors cautious, while a surprise draw in oil stocks gave crude some support.

TODAY’S WATCHLIST
 - RBI MPC Minutes
 - FOMC Minutes
 - ECB President Lagarde Speaks  
 
THE BIG STORY
The US Commerce Department announced it is expanding steel and aluminum tariffs to cover 407 additional derivative products, including wind turbines, mobile cranes, appliances, bulldozers, railcars, motorcycles, marine engines, furniture, and hundreds of other items. These tariffs impose 50% on the steel and aluminum content of the products, plus the country-specific rate on non-steel and non-aluminum components, impacting more than $200 billion in imports and raising the overall effective tariff rate by around one percentage point, according to Evercore ISI. 

The move also includes imported parts for automotive exhaust systems and electrical steel needed for electric vehicles, along with components for buses, air conditioners, and household appliances, despite warnings from foreign automakers that the US lacks the domestic capacity to meet current demand. 

Meanwhile, President Donald Trump said he ruled out putting US troops on the ground in Ukraine but may provide air support as part of efforts to end Russia’s war, following a White House summit on security guarantees. The path to peace remains uncertain as Russia launched its largest air assault in over a month after the talks, with Trump noting that it remains to be seen whether President Putin is willing to make a deal.

DATA SPOTLIGHT
US residential construction showed mixed signals in July, as single-family housing starts increased 2.8% to an annualised rate of 939,000 units, while permits for future single-family homes rose 0.5%, snapping a four-month decline. Overall residential starts jumped 5.2%, driven by a surge in multi-family projects, which rose 11.6% to 470,000 units, marking the highest level since May 2023. However, total permit issuance fell 2.8% to a five-year low of 1.354 million units, led by a nearly 10% drop in multi-family permits, raising concerns about future activity. 

On the energy front, US crude oil inventories dropped 2.4 million barrels in the week ending August 15, 2025, reversing the 1.5-million-barrel increase recorded the previous week and exceeding expectations of a 1.2-million-barrel draw, reflecting tightening supply.

Takeaway: US housing activity remains uneven, with strong gains in multi-family construction offset by declining permits, signalling potential moderation in future growth. Meanwhile, crude oil inventories fell more than expected, pointing to tightening supply in the energy market.

WHAT HAPPENED OVERNIGHT

• US tech sell-off pulls Nasdaq down ahead of Powell’s key speech
  
  • Tech mega caps dragged down Nasdaq, with Nvidia falling 3.5%.
  • Dow briefly hit a record high, boosted by Home Depot (+3.17%) and Lowe’s (+2.18%) 
    
    

• US Treasury yields pause as markets weigh Fed outlook
  
  • Yield on the 10-year US Treasury note eased toward 4.3% on Tuesday, following three consecutive sessions of 10bps gains.
  • Markets digested the Fed’s rate outlook ahead of upcoming FOMC minutes, which are expected to clarify views on labor market slowdown and dissenting votes on rate cuts.
    
    

• US dollar mixed ahead of Jackson Hole Symposium
  
  • US Dollar showed mixed performance on Tuesday as markets awaited Fed Chair Powell's speech at the Jackson Hole Economic Policy Symposium later this week.
  • Traders are looking for guidance on US interest rate policy and whether Powell will counter market expectations of a September rate cut.
    
    

• Crude oil slip on potential easing of Russian sanctions
  
  • Brent crude settled at $65.79/barrel, down 1.22%, while WTI for September delivery fell 1.69% to $62.35/barrel.
  • Decline driven by speculation that a deal over Russia-Ukraine could ease sanctions, increasing global crude supply.

Day’s Ledger

Economic Data:

• Japan August Manufacturing, Services PMI Flash
• Euro July CPI Inflation
• India August Manufacturing, Services PMI Flash
• India M3 Money Supply

Corporate Actions:

• Earnings: Shanti Gold, PVP Ventures, Picturehouse Media
• Arunis Abode to consider rights issue
• GRM Overseas to consider bonus share issue

Policy Events:

• RBI MPC Minutes
• FOMC Minutes
• ECB President Lagarde Speaks  
• Fed Bostic Speech
• Fed Waller Speech

TICKERS TO WATCH

• HC directs Maharashtra Airport Development Co to refund dues to WIPRO
• IDFC FIRST BANK board clears preference share allotment to Platinum Invictus
• IRFC approves fresh term loan facility for Surat transport corporation
• LLOYDS METALS wins bid for coking coal mine on MP-Maharashtra border
• MANKIND PHARMA forms Russia arm to distribute Bharat Serums products
• SRF inks pacts with US firm Chemours for fluoropolymers, fluoroelastomers
• STERLING AND WILSON appeals against Acuit Ratings credit assessment
• EMAMI AGROTECH enters branded staples market, targets ₹20 billion in 5 years

MUST READ: 

• SEBI's index norm relaxation to ease $1 bn sell-off risk for HDFC, ICICI
• Listed firms, open offers may gain from SEBI'S relaxed MPS stance
• Jio's data tariff move is good news for Bharti Airtel, Vodafone Idea
• Govt likely to tighten rules for money-based games in Online Gaming Bill
• Potential to upgrade rating of Reliance Industries, says S&P Global Ratings
• S&P Affirms US Credit Rating as Tariff Revenue Expected to Plug Fiscal Leaks
• India and China Cautiously Mend Ties as Tariffs Cloud Economic Outlook
• Modi Hails China Ties as Bessent Swipes at India’s Rich Families
  
  

See you tomorrow with another edition of The Morning Edge.

Have a great trading day.

Atmanirbhar Bharat: Between Slogan and Substance

From the early triumphs of PPE kits and vaccines to the rise of mobile phone and defence exports, Atmanirbhar Bharat has had undeniable successes. Yet, as Dr Subbarao cautions, the line between resilience and protectionism is thin. Tariffs, half-successful PLI schemes, and neglect of exports could leave India vulnerable to repeating the closed-economy mistakes of the past.

His essay is a timely reminder that self-reliance must mean confidence to compete globally, not the comfort of building walls at home.