Global Markets Cautious as US Tariff Confusion Weighs, Nvidia Earnings to Test AI Rally

Global financial markets opened the week on a guarded note as investors assessed fresh uncertainty around US trade tariffs and braced for a critical earnings report from semiconductor heavyweight Nvidia. The dollar slipped in Asian trading, while oil prices eased ahead of renewed US Iran negotiations scheduled for Thursday in Geneva.

Tariff Confusion Clouds Market Sentiment​

Investor sentiment remained fragile after the US Supreme Court struck down President Donald Trump's emergency tariffs. In response, Trump announced a new 10 percent tariff on the rest of the world, which was subsequently lifted to 15 percent. The rapid sequence of decisions created confusion across global markets.

Uncertainty persists over when the revised tariffs would be imposed, which sectors might be excluded, and whether all countries would be subject to the 15 percent rate. Some nations, including the UK and Australia, previously operated under a 10 percent tariff structure, while several Asian economies faced higher duties.

Market participants highlighted that continued policy reversals could deepen volatility, particularly if new tariffs are introduced and later overturned in a recurring cycle. The shifting tariff framework has amplified concerns about economic stability and trade predictability.

Asian Markets Mixed as Investors Await Clarity​

Against this backdrop, MSCI's broadest index of Asia Pacific shares outside Japan edged up 0.5 percent in subdued trading.

Japan's Nikkei index remained closed for a holiday, though futures traded at 56,970 compared to a prior cash close of 56,825. South Korean equities extended their rally, rising another 2.0 percent after a 5.5 percent surge last week that pushed the market to record highs.

Nvidia Earnings to Test AI Trade Momentum​

Attention now turns to Nvidia, whose upcoming earnings report is expected to test confidence in the broader artificial intelligence investment theme. The company accounts for nearly 8 percent of the S&P 500 index, underscoring its market influence.

S&P 500 futures fell 0.3 percent, while Nasdaq futures declined 0.4 percent ahead of the results.

The world's most valuable company is projected to report a 71 percent increase in earnings per share to $7.76. However, analyst estimates vary widely, ranging from $6.28 to $9.68. Options pricing suggests its shares could move at least 6 percent in either direction following the announcement.

Given Nvidia's substantial index weighting, any sharp movement could significantly impact broader US equity benchmarks.

Treasury Markets React to Tariff Risks​

US Treasury markets have also been affected by tariff developments. If the earlier tariffs are overturned permanently, the US government could be required to repay approximately $170 billion in revenue.

Such a scenario would, on paper, widen the fiscal deficit by half a percentage point to around 6.6 percent of GDP.

With Japan observing a holiday, cash Treasuries were not trading, though 10 year note futures slipped by two ticks.

Federal Reserve Rate Cut Expectations Recalibrated​

Recent economic data has presented a mixed picture. Economic growth in the December quarter fell short of forecasts, while core inflation surprised on the upside.

As a result, the probability of a June rate cut from the Federal Reserve has declined to around 52 percent, compared with more than 60 percent a week earlier. The shifting outlook had supported the dollar on a weekly basis, though it came under pressure early Monday amid renewed trade uncertainty.

Dollar Slips Against Major Currencies​

In Asian trading, the US dollar weakened 0.4 percent against the Japanese yen to 154.36. The euro gained 0.4 percent to $1.1826, while the dollar fell 0.5 percent against the Swiss franc to 0.7718.

Market participants noted speculation that ongoing trade policy disruptions could reinforce a broader sell America theme observed in recent months.

Gold and Silver Gain as Safe Havens​

Precious metals advanced as investors sought safety. Gold rose 0.8 percent to $5,143 per ounce, while silver climbed 2 percent to $86.24 per ounce, extending gains after nearly an 8 percent rally on Friday.

Oil Prices Ease Ahead of US Iran Talks​

Crude oil prices turned lower as traders awaited another round of US Iran negotiations in Geneva. Brent crude slipped 0.6 percent to $71.29 per barrel, and US crude declined 0.8 percent to $65.95 per barrel.

Oil had gained last week after Trump indicated the US military could strike specific targets in Iran if a nuclear agreement was not reached. The renewed talks have added a layer of geopolitical uncertainty to energy markets, keeping volatility elevated.

As the week progresses, clarity on US tariff implementation and Nvidia's earnings performance are likely to set the tone for global markets and determine whether risk appetite stabilizes or remains under pressure.