The Morning Edge: Bessent Defends Trump’s Economic Agenda as Long-Term Growth Engine

QUICK SNAPSHOT
Global Sentiment: Risk-off
Factors: Trade Developments. FOMC Meet, OPEC Output Hike

TODAY’S WATCHLIST
 -India April S&P Global Services PMI
 -US FOMC Meeting Starts
 -US March Trade Data

THE BIG STORY
US Treasury Secretary Scott Bessent on Monday framed President Donald Trump’s tariffs, tax cuts, and deregulation as a coordinated strategy to boost domestic investment, insisting markets would overcome near-term volatility. Speaking at the Milken Institute Global Conference, he argued that permanent tax incentives—including expanded credits for R&D and factory construction—would reward companies reshoring production, ultimately fuelling jobs, innovation, and growth nearing 3% by 2025.

The bullish outlook contrasts with January-March’s economic contraction and IMF forecasts of just 1.8% growth next year, as tariff-driven import surges and budget deficits weigh on momentum. Bessent, however, dismissed short-term headwinds, declaring the agenda would deliver “more of everything” from semiconductors to energy security. 

DATA
The US services sector expanded in April with the ISM non-manufacturing PMI rising to 51.6 versus 50.2 forecast, though businesses flagged intensifying inflation pressures as tariff-related costs pushed the prices paid index to a two-year high. While new orders improved to 52.3 in April from 50.4 in March, the report revealed widespread concerns about Trump's trade policies and proposed spending cuts disrupting the sector driving two-thirds of the economy. The data suggests temporary front-loading of demand ahead of tariffs may be artificially buoying growth indicators. 

WHAT HAPPENED OVERNIGHT
US stocks indices S&P 500 fell on Monday, ending its longest winning streak in two decades, as Trump's surprise 100% tariff on foreign films and OPEC+'s accelerated production hikes rattled markets. Netflix (-1.9%) and Amazon (-1.9%) led tech declines, while energy stocks dropped 2% amid oil oversupply concerns ahead of this week's Fed meeting. Treasury Secretary Scott Bessent defended Trump's economic agenda on Monday, insisting that short-term market turbulence from tariffs would be outweighed by long-term gains from tax cuts and deregulation.

US Treasury yields edged higher on Monday, with the 10-year rising 2.9 basis points to 4.349% and the 30-year up 4.1 basis point to 4.836%, after stronger-than-expected services data showed persistent inflation pressures. The policy-sensitive 2-year yield was nearly flat at 3.843%, reflecting cautious Fed expectations despite the sector's resilience. 

The dollar index slipped 0.06% to 99.82, pressured by the euro's 0.13% advance to $1.131 and the yen's 0.8% surge to 143.77. These moves reflect growing speculation that dollar is  becoming collateral damage in Washington's trade negotiations

Brent crude oil prices dropped more than $1 a barrel on Monday, closing at their lowest levels in over four years, after OPEC+ moved to accelerate production increases. The decision raised concerns of a potential supply glut just as global demand remains clouded by economic uncertainty. 

DAY’S LEDGER
Economic Data:

• India April S&P Global Services PMI
• Eurozone April Composite PMI
• US March trade data
• EIA to release energy outlook for May

Corporate Actions:

• Aadhar Housing Finance,  Aarti Drugs, Ador Welding, Alembic Pharmaceuticals, Aptus Value Housing Finance India, Bank of Baroda, BSE, Century Enka, CG Power and Industrial Solutions, Cybertech Systems And Software, Godrej Consumer Products, Hindustan Petroleum Corporation, JBM Auto, Kajaria Ceramics, Kansai Nerolac Paints, KEI Industries,  Mahanagar Gas,  One 97 Communications, Paradeep Phosphates, Piramal Enterprises, Poly Medicure, Polycab India, Quick Heal Technologies, Radico Khaitan,  Safari Industries (India),  Sambhaav Media, Shipping Corporation of India. Sundaram Clayton, and Tamilnadu PetroProducts
• Housing & Urban Development Corporation to consider fund raising
• Puravankara to consider fund raising

Policy Events

• US FOMC meeting starts

TICKERS

• Indian Hotels March quarter Net Profit Rises 25% YoY to ₹5.22 Billion
• J&K Bank March quarter Net Falls 8% YoY to ₹5.85 Billion on Higher Expenses; FY Profit Rises 18%.
• DCM Shriram March quarter Profit Jumps 52% YoY to ₹1.79 bln on Higher Income.
• Coforge's March quarter Net Profit Rose 16.5% to ₹2.61 bln, With Revenue Jumping 47%.
• Bajaj Consumer March quarterProfit Drops by 12.93%, Revenue Rises by 4.39% YoY.
• Prestige Estates Issues ₹21.1 Billion Corporate Guarantee for Subsidiary Loan.
• IRCON Bags ₹1.87 Billion Order to Build Rural Industrial Park in Kerala.
• IEX Power Trade Volume Rises 26% in April; Green Market Doubles.

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