Broker: OCBC Investment Research
Date of Report: 10 July 2025

Global Markets Rally Amid Trade War Jitters: In-Depth Analysis and Top Equity Picks for 2025

Market Overview: Tech Surge Outpaces Trade War Concerns

The global equity landscape has staged a powerful rebound even as renewed trade war anxieties linger. US stocks soared, led by technology giants, with Nvidia briefly reaching a US\$4 trillion market capitalization. The Dow Jones Industrial Average climbed by 218 points (+0.5%), the S&P 500 by 0.6%, and the Nasdaq Composite by 0.9%. Utilities (+1%) and technology (+0.9%) led sector gains, while consumer staples underperformed, down 0.6%. Microsoft and Amazon also posted notable advances.
Bond markets rallied despite mixed signals from the Federal Reserve’s June meeting minutes, which revealed internal debate about the timing of interest rate cuts. Most Fed officials anticipate cuts later in 2025, viewing inflation spikes from new US tariffs as “temporary or modest.” However, there was minimal appetite for an immediate rate cut, with the next labor market data seen as a key indicator.
US President Donald Trump’s latest tariff announcements include:

• 50% tariffs on imports from Brazil
• 30% tariffs on Algeria, Libya, Iraq, and Sri Lanka
• 25% on Brunei and Moldova
• 20% on goods from the Philippines

These moves, largely consistent with previous April declarations, have yet to derail the equity rally, as investors appear to discount the risks of a major economic slowdown.

European Equities: Bank M&A Speculation and Tariff Headwinds

The Stoxx Europe 600 Index jumped 0.8%, led by banking stocks after UniCredit SpA doubled its equity stake in Commerzbank AG to 20%. This bold move fueled speculation about further M&A activity across European banks, driving the Stoxx 600 Banks Index up 2.0%. In contrast, mining stocks slumped on the back of a 50% tariff threat on copper, while healthcare stocks lagged as US authorities mulled tariffs of up to 200%.

Asia-Pacific Markets: Tech Laggards and Tariff Pressures

The MSCI Asia Pacific Index dipped 0.4%, with tech heavyweights Alibaba, Tencent, and Samsung Electronics among the major drags. Hong Kong equities underperformed, notably on weakness in metals stocks following the US copper tariff announcement.

Singapore Market Snapshot: Modest Gains Amid Lower Volumes

• Straits Times Index: 4,057.8 (+0.2%)
• FTSE ST Financials: 1,599.7 (-0.2%)
• FTSE ST REITs: 651.0 (+0.2%)
• FTSE ST Real Estate: 656.6 (+0.6%)
• Volume: 1,160.9 million (-23.7%)
• Turnover: 1,223.3 million (-26.0%)
• 52-week range: 3,198.4 – 4,064.6
• Gainers/Losers: 285 / 196

World Indices Performance

FX & Commodities

• USDSGD: 1.2803 (-0.1%)
• USDJPY: 146.33 (+0.2%)
• WTI Crude: USD 68.38/bbl (+0.1%)
• Brent: USD 70.19/bbl (+0.1%)
• Gold: USD 3,313.7/oz (+0.4%)
• Silver: USD 36.39/oz (-1.0%)

Latest Equity Research: Top Reports and Sector Insights

A snapshot of the latest research coverage:

Singapore’s Largest Stocks: Market Cap, Valuation, and Analyst Sentiment

A comprehensive breakdown of the Straits Times Index (STI) constituents, sorted by market capitalization:

Key Takeaways for Investors

• Global stock markets are demonstrating resilience despite ongoing trade tensions and tariff escalations.
• US tech mega-caps continue to drive market gains, while European banks are in focus amid renewed M&A speculation.
• Asia’s markets are weighed down by the tech sector and commodity tariffs, with Hong Kong particularly hard hit.
• Singapore’s market shows steady performance, with defensive sectors and REITs attracting continued interest.
• Dividend yields and valuation metrics remain crucial for stock selection in the current environment.

Disclosure and Research Methodology

All opinions, ratings, and recommendations are based on medium-term (12-month) views. Ratings definitions:

• BUY: Expected total return (excluding dividends) >10%
• HOLD: Expected total return (excluding dividends) between +10% and -5%
• SELL: Expected total return (excluding dividends) less than -5%
• For REITs and Business Trusts: Total expected returns including dividends

For small-cap companies (market cap S\$150m and below), thresholds are higher (BUY >30%, HOLD within +/-30%, SELL <-30%).

Conclusion

Global markets are navigating a challenging landscape shaped by trade policies, interest rate expectations, and sector rotation. Investors are advised to focus on quality, yield, and sector trends while keeping a close eye on evolving macroeconomic signals. The comprehensive data and recommendations above offer a robust foundation for informed decision-making in the second half of 2025.