Morning Bid: Results first, worries later

• Trump raised tariffs on South Korean imports to 25% from 15%, yet South Korea's KOSPI reached a new high as investors prioritized tech sector earnings over trade concerns
• The dollar index declined further after its worst Monday performance, while Japan's yen held at year-best levels on speculation of joint intervention ahead of next month's snap election
• India and the EU announced a major trade deal to cut duties on most goods, contrasting with U.S. tariff increases, with implementation expected within a year

Market Summary: Results First, Worries Later

Key Market Movements

Global markets advanced Tuesday despite fresh tariff threats, with the S&P 500 closing 0.5% higher Monday and futures indicating further gains. The Nikkei and South Korea's KOSPI also rose, with the KOSPI reaching new highs despite being targeted by U.S. trade actions.

Tariff and Trade Developments

President Trump announced a tariff increase on South Korean goods to 25% from 15%, citing implementation issues with a previous pact. Despite trade tensions, the South Korean exchange continued climbing. In contrast, India and the EU announced a long-delayed trade deal cutting duties on most goods, expected to be implemented within a year after vetting.

Currency and Commodities

The dollar index experienced its largest single-day decline, falling further amid speculation about joint U.S.-Japan intervention to support the yen. Japan's yen held at its strongest levels of the year. Gold and silver remained firm, reflecting continued global uncertainty.

Central Bank Focus

The Federal Reserve's two-day policy meeting begins Tuesday, with a decision expected Wednesday. While rates are anticipated to remain steady, investor attention centers on the Fed's response to potential threats to its independence and pressure from Trump for faster rate cuts. Long-term Treasury yields have declined ahead of the meeting.

Corporate Earnings

Major companies reporting include Boeing, GM, UnitedHealth Group, UPS, Union Pacific, Northrop Grumman, and NextEra Energy. Investor focus on mega-cap tech earnings and the AI boom has temporarily overshadowed tariff concerns.

Political Developments

Trump administration appeared to moderate its stance on the Minnesota ICE protest shooting, with approval of Trump's immigration policy falling to its lowest post-inauguration level.