Investors brace for volatility as US trade talks, policy shifts rattle global markets

Dubai: Global and UAE investors alike may need to buckle up this week, as a mix of tariff tensions, U.S. policy shifts, and economic data keep markets on edge.

After weeks of bullish momentum in global equities, driven by optimism that U.S. tariffs may be paused and the economy is holding up, sentiment is starting to shift. Caution is setting in — and for good reason.

The July 9 deadline set by President Trump for reaching key trade agreements is just around the corner. Failure to ink those deals could trigger new tariffs as high as 70%, potentially upending global trade flows and shaking investor confidence.

“There’s still uncertainty out there,” said Tony Sycamore, market analyst at IG Australia. “But one thing we do know is the U.S. economy seems to be holding up relatively well.”

That strength was evident in last week’s surprise U.S. jobs report, which exceeded expectations and caused markets to scale back bets on a July interest rate cut. The dollar edged lower, gold gained, and risk assets showed signs of hesitation.

In parallel, Trump also secured a massive $3.4 trillion domestic fiscal package, including tax cuts and trimmed safety-net spending — part of a broader deal that raises the debt ceiling by $5 trillion. While this removes the risk of a near-term default, it adds a new layer of long-term debt concerns for investors watching U.S. fiscal policy.

Some investors are now playing it safe. "I find too much optimism among other managers a bit uncomfortable," said Jung In Yun, CEO of Fibonacci Asset Management Global in Singapore, who has raised cash levels in portfolios ahead of this week’s moves. “Portfolio has more cash than normal times for now.”

Whether you're trading in Abu Dhabi, watching gold in Dubai, or managing global assets, this week could bring unexpected swings. Caution is warranted — but so is staying alert for opportunity.

- With inputs from Agencies