1. Overview of Key Global Issues

1.1 Policy Uncertainty and Geopolitical Risks

• U.S. Policy Shifts: Potential re-election of Donald Trump and the threat of 25–40% tariffs on major trading partners increase market anxiety.
• Rising Protectionism: New tariffs and retaliatory actions risk further global slowdown and supply chain disruptions.
• Middle East Conflicts: Ongoing tensions involving Israel, Hamas, and Iran fuel geopolitical uncertainty and oil price volatility.
• Cybersecurity Threats: State-sponsored cyberattacks are rising, increasing operational and reputational risks for businesses.

1.2 Inflation and Interest Rate Dilemma

• Persistent Inflation Pressure: Rising import costs driven by tariffs are keeping inflation elevated.
• Fed Rate Policy: Deloitte expects the Fed to cut rates by 50bps in Q4 2025, but at a slower pace than markets anticipate.

1.3 Slowing Global Growth & Realignment

• Advanced Economies Slowing: OECD projects U.S. growth at 1.6% and global growth at 2.9% in 2025.
• Emerging Market Resilience: JP Morgan highlights India’s leading growth and strong prospects for Korea, Brazil, the Philippines, UAE, Greece, and Poland.

1.4 The Impact of AI Technology

Continued advancements in AI are boosting productivity and creating new business opportunities, while also raising concerns about misuse and data overload.

2. Impact on the Stock Market

• Increased Market Volatility: Geopolitical risks and unexpected policy changes may trigger short-term shocks.
• Potential End of Dollar Strength: A shift toward a weaker dollar could benefit emerging markets, though some U.S. policies may temporarily strengthen it.
• Export-Heavy Companies at Risk: Tariffs and trade barriers could hurt firms reliant on global supply chains.
• AI and Tech Stocks in Focus: Semiconductors (e.g., NVIDIA, AMD) and cloud service providers remain key growth drivers.
• Limited Impact from Rate Cut Expectations: Ongoing inflation could delay easing, keeping bond market volatility high.
• Opportunities in Emerging Markets: Favorable valuations and stronger growth may attract foreign investment.
• Defense & Energy Sectors Gaining Attention: Geopolitical instability and oil price swings increase sector relevance.
• Tax Policy Changes in Korea: Proposed measures (trading tax hike, capital gains reform) may dampen retail investor sentiment.

3. Conclusion and Investment Strategy

As of July 2025, global markets face a complex environment shaped by unpredictable policies, inflationary pressure, and interest rate decisions. Meanwhile, innovations like AI and emerging market momentum present long-term opportunities. Investors should diversify portfolios and focus on sectors such as technology, defense, and energy, while keeping an eye on geopolitical and monetary developments.