Competing drivers will direct markets in the coming days with the latest earnings report from the world’s biggest public company, US-Iran tensions and President Trump’s tariffs all taking centre stage. Friday’s news that the US Supreme Court had struck down POTUS’ tariffs was not unexpected but slightly delayed. The initial market reaction saw stocks rally and both US Treasuries and the dollar fall, but the wider impact may shift in the coming days and weeks, though policy chaos and the “Sell America” theme could initially dominate.
Many trade experts do not think that the bullish global growth story, which also saw AUD and other pro-cyclical currencies rally, will last too long as the tariff relief rally fades. President Trump has a broad toolbox he can use which ultimately can target specific sectors more precisely than his initial broad-brush approach. The Supreme Court ruled on constitutional limits, not trade policy, and that means Trump’s tariff agenda survives, but just with new legal foundations, a messy transition period and similar economic impact.
US-Iran risk and American military strikes are coming to a head soon with much speculation that Trump is ready to go, within the 10-day period given to Iran to agree to a deal. Brent crude has jumped above $70 with near-term resistance above at the July 2025 highs around $72.79. The dollar has been supported recently amid higher oil prices. This highlights the post-Liberation Day impact that the greenback’s safe‑haven appeal is now more broadly diminished but does come into play when geopolitical tensions trigger oil shocks. That is also due to alternative safe havens like JPY and EUR being net energy importers and their terms of trade get hit when crude prices surge. Obvious de-escalation will reverse these trades.
Stocks haven’t been that disrupted by the current geopolitical tensions, while the epic rotation out of megacap tech and software into “real stuff” took a breather last week. Market consolidation after gigantic sector moves is logical but does not necessarily indicate a reversal. NVDA reports on Wednesday after the US close, and that will be a big deal because it has not benefited from the textbook “picks & shovels” trade that has unfolded in recent weeks. We note gold looks to be moving to the upside as China returns from Lunar New Year. Much-larger-than-normal US tax refunds should boost consumers which may see flows into bullion.