“Sands in the wheels” of global trade and capital spending: While financial markets project an image of stability, the global economy is showing deepening scars from Washington’s trade policies, with companies worldwide freezing investments and living with slimmer margins to absorb the fallout from the highest US tariff rates since the 1930s, Bloomberg reports. The economic pressure is set to intensify as another one of President Donald Trump’s tariff deadlines goes into effect this Friday.

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How bad are the tariffs, actually? The average US tariff has increased to almost 13.5% from 2.5% last year before Trump took office, with that number expected to rise further to 16% after the latest agreement with the EU is implemented, according to Bloomberg Economics estimates. Tariffs act like “a tax that puts sand in the wheels of supply chains and global trade,” even if they are not as high as previously feared, Daniel Harenberg of Oxford Economics said.

Trump’s “America First” policies could cost the global economy USD 2 tn by 2027, according to projections by Bloomberg Economics. Business investment forecasts for 2026 have been lowered across all G7 nations and nearly halved for the US, Canada, Japan, and Italy specifically. Uncertainty from the trade war has led companies to delay major investments amid the highest US tariff rates in decades, and some investments that have been announced are mainly geared towards restructuring supply chains to work around tariffs, UNCTAD said in its annual World Investment Report.

Reality check: Despite Trump’s claims of a “booming” economy, tariffs continue to erode corporate net income. Treasury Secretary Scott Bessent celebrated the investment rebound as “CapEx Comeback;” however, it is largely an artificial pre-tariff surge that has since stalled.

The global macroeconomic picture stands in contrast with a rally on Wall Street pushing stock valuations to near-record highs, but the “euphoric” conditions are sparking fears of a market bubble, the Financial Times reports. The S&P 500 hit record peaks, Nvidia became the first USD 4 tn public company, “meme stocks” reappeared, and BTC rose past USD 120k. This is a “dangerous set up,” showing parallels to the dot-com boom, as investors, relieved by recent trade agreements, drive markets higher despite underlying risks,” Pimco CIO Dan Ivascyn warns.

MARKETS THIS MORNING-

It’s a sea of red in Asian markets, with Japan’s Nikkei, South Korea’s Kospi, China’s Shanghai and the Hang Seng Index all down in early morning trading as investors are in wait-and-see mode with ongoing US-China trade talks. The picture is only slightly rosier over on Wall Street, where futures indicate the Dow Jones, S&P 500, and Nasdaq will all open just barely in the green later today.

EGX30

34,076

-1.4% (YTD: +14.6%)

USD (CBE)

Buy 48.71

Sell 48.84

USD (CIB)

Buy 48.73

Sell 48.83

Interest rates (CBE)

24.00% deposit

25.00% lending

Tadawul

10,885

-0.7% (YTD: -9.6%)

ADX

10,362

+0.2% (YTD: +10.0%)

DFM

6,168

+0.3% (YTD: +19.6%)

S&P 500

6,390

0.0% (YTD: +8.6%)

FTSE 100

9,081

-0.4% (YTD: +11.1%)

Euro Stoxx 50

5,338

-0.3% (YTD: +9.0%)

Brent crude

USD 70.18

+2.5%

Natural gas (Nymex)

USD 2.99

-3.9%

Gold

USD 3,367

-0.8%

BTC

USD 118,259

-0.8% (YTD: +26.4%)

S&P Egypt Sovereign Bond Index

881.9

+0.1% (YTD: +13.4%)

S&P MENA Bond & Sukuk

146.2

0.0% (YTD: +4.5%)

VIX (Volatility Index)

15.03

+0.7% (YTD: -13.4%)

THE CLOSING BELL-

The EGX30 fell 1.4% at yesterday’s close on turnover of EGP 4.8 bn (4.7% below the 90-day average). Local investors were the sole net buyers. The index is up 14.6% YTD.

In the green: GB Corp (+2.1%), Egypt Kuwait Holding -USD (+0.5%), and Fawry (+0.3%).

In the red: Palm Hills Developments (-3.8%), Edita (-3.6%), and Mopco (-3.5%).

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