"Interest Rate Cut Expectations" US Stocks Rebound Sharply…Trump Puts Tariff Pressure on India [Morning Briefing]

◆ Strong performance on the New York Stock Exchange…influx of bargain hunters

After plunging following the release of an employment report suggesting a weakening US labor market, the New York Stock Exchange closed higher. On the 4th local time, the Dow Jones Industrial Average (DJIA) rose 1.34% from the previous session to 44,173.64, the S&P 500 Index rose 1.47% to 6,329.94, and the NASDAQ Composite Index jumped 1.95% to 21,053.58. The main indices on the New York Stock Exchange had previously fallen but rebounded due to an increase in bargain buying. This is interpreted as a rise in interest rate cut expectations, paradoxically fueled by worries about the labor market.

◆ "Stock prices are psychological"…weight on 'two rate cuts this year'

There were no particular economic indicators or events expected to impact the US stock market, but the sharp rebound in indexes is attributed to growing hopes for a policy rate cut in September. Near the close of trading, Mary Daly, President of the Federal Reserve Bank of San Francisco, remarked, "A total of two rate cuts for the remainder of the year is still considered an appropriate level of policy readjustment." The Federal Funds Futures Market reflected a 94.1% probability of a rate cut next month, effectively treating it as a foregone conclusion.

◆ The background to Trump stepping up tariff pressure on India

US President Donald Trump, facing a turbulent trade negotiation with India ahead of the mutual tariff implementation date on the 7th, asserted he would "significantly raise tariffs," pressuring India. He especially pointed out that India has made large purchases of Russian oil. Having previously pressured allied countries to negotiate tariffs, President Trump now faces imminent deadlines for both extending the 'tariff truce' with China and introducing 'secondary tariffs' related to Russia, forcing a key decision. His remarks are seen as strategic moves not only targeting India, but also aiming at Russia and another major importer of Russian energy, China.

◆ More managers in their 50s than new employees in their 20s

As new hiring declines and the retirement age increases, a 'generational reversal' has emerged in domestic companies where the proportion of employees in their 20s is now lower than that of those in their 50s and above. According to a July 5th analysis from the business research institute Leaders Index, which reviewed sustainability management reports and compared workforce compositions by age at 124 top-revenue companies since 2022, the share of workers under 30 fell to 19.8%, while those aged 50 or older rose to 20.1%. This is the first reversal of these age groups since the survey began in 2015, and also the first time the under-30 group has dropped below 20%.

◆ Scattered showers and continued heatwave across the nation

On this Tuesday (the 5th), brief showers are expected in parts of the country, but the sweltering heat continues. Scattered showers are forecast from morning through night in interior and mountainous areas of Gangwon, inland Chungcheong, and the southern regions. However, heatwave advisories remain in place in most areas nationwide, with afternoon highs reaching 30–35°C. Fine dust levels are predicted to remain at a "good" level in all regions.

Kim Bong-gu, Hankyung.com reporter kbk9@hankyung.com