Global markets are treading cautiously ahead of a looming August 1 deadline for new US tariffs, as investors weigh the risk of fresh trade tensions alongside major corporate earnings announcements this week.

Asian stocks were mixed on Tuesday. Gains in Tokyo, Hong Kong, Shanghai, and Sydney were offset by losses in Singapore, Seoul, Wellington, and Manila, reflecting investor uncertainty amid political developments in Japan and stalled global trade talks.

In Japan, Prime Minister Shigeru Ishiba’s decision to remain in office despite his coalition’s electoral setbacks boosted investor sentiment slightly. The yen strengthened to 147.08 against the US dollar before trimming some gains. Analysts, however, warned of continued political instability as Ishiba faces mounting pressure over inflation, tax policy, and negotiations with the United States.

On Wall Street, optimism continued after the S&P 500 closed above 6,300 for the first time and the Nasdaq notched another record. US President Donald Trump’s suggestion that several trade agreements are near completion helped sustain the rally. Thus far, only three deals have been finalised.

Trump’s press secretary, Karoline Leavitt, said more agreements could be reached before the Friday deadline but warned the president might impose new unilateral tariffs if talks falter. The White House has signalled that there will be no deadline extensions this time.

“The new tariff regime isn’t being priced—full stop,” said Stephen Innes of SPI Asset Management. “Markets have seen this movie before: tough talk, last-minute extensions, and deal-making in overtime. But this time, Trump isn’t bluffing.”

If implemented, the proposed tariffs—30% on the European Union, 35% on Canada, and 50% on Brazil—would be among the most severe to date. Innes warned they would be “politically loaded and economically radioactive,” with no easy path to recovery.

Despite the tensions, some analysts remain optimistic, citing the resilience of the US economy. Recent data suggests it continues to grow despite earlier rounds of tariffs.

Hong Kong’s Hang Seng Index continued its strong 2025 rally, buoyed by Chinese tech stocks and sustained capital inflows from mainland China. The index has risen around 25% year-to-date, making it one of Asia’s top performers.

Investor attention is also shifting to a wave of high-profile earnings this week. Results from Tesla, Alphabet (Google’s parent company), General Motors, Intel, and Coca-Cola are expected to offer insights into how large corporations are navigating the uncertainties of Trump’s trade war.

While quarterly profits will attract interest, analysts say forward guidance will be more crucial as markets try to assess the broader economic impact of potential new tariffs.

As the August 1 deadline nears, the global financial community remains on high alert, bracing for what could be a defining moment in the ongoing US-led trade standoff.