US stocks struggled to find direction on Tuesday as investors reacted to President Donald Trump’s renewed tariff threats, while still clinging to hopes of continued negotiations. The S&P 500 declined, the Dow dropped 0.36% and the Nasdaq edged down by 0.06%. President Trump confirmed that tariffs ranging from 25% to 40% on 14 countries including Japan and South Korea would commence on 1 August, despite earlier hints of flexibility. The mixed messaging contributed to market unease, with many traders optimistic that talks might still prevent a broader trade war.

European stock markets closed stronger, supported by relief over the region’s exclusion from the latest round of US tariffs. The STOXX Europe 50 rose by 0.50%, while the broader STOXX Europe 600 gained 0.41%. National indices also advanced, with Germany’s DAX up 0.55% and the UK’s FTSE 100 adding 0.54% to end at 8 854. Investor sentiment was buoyed by the White House’s decision to leave the European Union out of its new tariff measures, boosting optimism around EU export prospects. The move comes as European officials continue to negotiate to ensure that any future US tariffs remain below the 10% minimum threshold, in an effort to protect key trade flows. 

The South African rand firmed slightly, trading around R17.76 to the dollar on Tuesday, recovering from a decline of more than 1% the previous day. The initial drop followed President Donald Trump’s threat to impose a 30% tariff on South African exports, along with an additional 10% levy on countries aligned with the BRICS bloc, which includes South Africa. However, the subsequent extension of the tariff implementation deadline to 1 August created space for further diplomatic engagement, helping the rand stabilise.

Meanwhile, in Asia, Hong Kong’s Hang Seng Index rose by 1.10%, snapping a three-day losing streak. The rebound was led by gains in technology, consumer and financial stocks, following assurances from Chinese officials to curb excessive price competition among domestic firms—a move aimed at supporting corporate earnings and stabilising producer prices. Japan’s Nikkei 225 also advanced, gaining 0.26% to close at 39 689, as investor sentiment improved amid signs of flexibility over upcoming US tariffs.

Crude oil prices advanced, with WTI futures rising by 0.60% to $68.30 per barrel, approaching two-week highs. The gains were driven by renewed concerns over the potential economic fallout from the proposed tariffs, as well as tight supplies of middle distillates and ongoing disruptions to shipping caused by continued Houthi attacks. These factors outweighed the impact of a larger-than-anticipated production increase announced by OPEC+ for August.