Global Stocks Rally with Wall Street, but July Risks Loom

Global equity markets followed Wall Street’s lead, extending gains after the S&P500 and Nasdaq Index both closed at fresh record highs last week, driven by strength in the U.S. tech stocks and optimism over the eased geopolitical outlook.

Asia-Pacific indices and European futures posted modest advances on Monday’s opening, with sentiment buoyed by improving investors sentiment, and also the weaker U.S. dollar.

U.S. Strength Supports Global Risk Assets

The U.S. equity rally—fuelled by AI-driven tech stocks and soft inflation readings—has provided a tailwind for global markets. Nasdaq and S&P 500 continue to benefit from easing expectations on Fed policy, as traders grow confident that the central bank could begin cutting rates later this year.

However, despite the upbeat momentum, investors tone may now remain cautiously optimistic as market approach a critical period in early July, where Trump’s 90-days tariff pause could test the resilience of the risk rally.

Trump’s 90-Day Tariff Pause Set to Due

One of the major market concerns is the upcoming July 9 due date on the U.S. President Trump’s 90-day pause on planned tariffs. While markets have priced in positively on the temporary calm, any signals of the tariff reinstatement or trade concern rhetoric could reignite the global trade tensions—particularly between the U.S. and China trade truce that remain uncertainty.

Such a development would likely weigh on risk-sensitive assets and currencies, especially the Australian Dollar or Canadian Dollar and emerging market equities, which are highly exposed to global trade dynamics, not only that, if the trade dynamic change, this could lead to a broader market challenge also.

All Eyes on U.S. Labor Market Data This Week

Adding to the cautious stance is the importance of upcoming U.S. labor market data, including:

• ADP Employment Change (Wednesday, July 2)
• Nonfarm payrolls report (Thursday, July 3)

U.S. Key Labor Data | Source: Ultima Market Economic Calendar

Economists are forecasting +110,000 jobs added in June, with unemployment ticking up to 4.3%. A weaker-than-expected print could strengthen the case for Fed rate cuts, potentially fuelling further equity upside—but may also raise concerns about U.S. economic resilience.

Outlook: Positive Momentum Meets Event Risk

While global equities are supported by Wall Street strength and easing inflation, markets may enter a more volatile phase in July. With Trump’s tariff pause nearing expiration and key labor market data due, investors are likely to stay selective, favoring assets with strong earnings visibility and lower geopolitical exposure.

“Until clearer signals emerge, the current phase is likely to remain a battle between bullish momentum and cautious positioning.”, said Shawn, Ultima Market Senior Analyst

Disclaimer

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