What does the new trade deal with India mean for US investors?President Donald Trump announced a significant trade agreement with India that immediately reduces the US tariff on Indian goods from 25% to 18%. This development was confirmed by Prime Minister Narendra Modi, who has committed to increasing imports from the US, focusing on sectors such as energy, agriculture, and technology. This deal is particularly important as it also includes India’s commitment to halt purchasing Russian oil, redirecting its energy sourcing towards the US and possibly Venezuelan alternatives. Trump emphasized that this agreement has the potential to unlock over $500 billion in future US exports, which could significantly impact the US economy and investor sentiment.
How are investors reacting to the trade deal with India?Following the announcement, investor confidence surged, which was reflected in the stock markets. The S&P 500 index rose by 0.7%, edging closer to its record highs. Meanwhile, the Nasdaq composite registered nearly a 0.8% gain, reversing its earlier losses and showcasing a positive shift among investors who welcomed the reduction in trade tensions and the clarity it brings to global market alignments.
What impact does this agreement have on safe-haven assets?As risk appetite improved, traditional safe-haven assets faced downward pressure. Gold prices fell 4% to $4,660, while silver saw a more significant downturn, dropping over 7% to $79. This decline signifies a notable retreat from recent highs, as market participants shifted their focus away from defensive hedges in light of the improved economic outlook.