Global Markets Steady as Investors Look Past Tariff Pressures

Global stock markets remained broadly resilient on Tuesday, even as investors faced a mix of conflicting signals, including growing trade pressures, sluggish services activity, and mounting fears of stagflation. Despite these headwinds, equity bulls continued to dominate market momentum, reinforcing the prevailing risk-on sentiment.

Concerns around U.S. inflation and economic stagnation were reignited after the latest ISM services data showed stagnant activity and rising input costs. While the figures suggest the economy may be losing steam, investors appeared to interpret the data as increasing the likelihood of policy support later this year. U.S. Treasury yields ticked higher, and bets on near-term rate cuts by the Federal Reserve were scaled back modestly.

Trade tensions also remained in focus, particularly after companies such as Caterpillar and Yum Brands reported softer demand and rising costs due to tariffs. These corporate warnings, paired with lackluster results from AMD’s data center segment, added to the sense that higher input costs are starting to weigh on margins across key sectors.

Still, equity markets have proven surprisingly resilient. Each market dip continues to attract opportunistic buyers, with investors largely maintaining confidence in the earnings outlook. Even with signs of strain, the S&P 500 remains close to its recent highs, supported by optimism around technology stocks and selective strength in industrials.

Asian markets followed a mixed path overnight. Japanese shares outperformed, driven by domestic earnings surprises, while Chinese and South Korean indexes lagged on concerns about slowing export demand. European stock futures pointed to a modestly positive open, reflecting a cautious but steady hand among global investors.

Adding to the complexity, news broke that OpenAI is reportedly exploring a secondary share sale that would value the firm near $500 billion—underlining investor appetite for high-growth artificial intelligence plays, despite broader market uncertainty. Meanwhile, the White House is expected to soon name a new nominee for a vacant seat on the Federal Reserve Board, a decision that could influence policy direction heading into 2026.

In the face of contradictory economic signals and geopolitical noise, investors appear to be navigating the market with short-term optimism and long-term caution. As the week progresses, focus will remain on inflation data, central bank commentary, and ongoing trade developments.