Asian markets advanced on Tuesday as investors balanced optimism around US mega-cap earnings with renewed uncertainty from President Donald Trump’s latest tariff threats, while separate developments in semiconductors and technology highlighted shifting global investment and revenue strategies.

Asian markets edge higher as earnings optimism offsets tariff worries

Asian shares posted modest gains as investors looked ahead to a heavy slate of earnings from US technology giants, even as trade tensions with South Korea limited broader risk appetite.

MSCI’s broadest index of Asia-Pacific shares outside Japan rose 1.18%, while Hong Kong’s Hang Seng index gained 1.3%.

Japan’s Nikkei gained 0.7%.

Markets appeared relatively resilient to Trump’s announcement late Monday that he plans to raise tariffs on imports from South Korea to 25%, accusing the country’s legislature of “not living up” to its trade deal with Washington.

The higher rate would apply to autos, lumber, pharmaceutical products, and other goods. South Korea’s KOSPI reversed earlier losses to trade up 0.8%.

In commodities, uncertainty boosted demand for safe havens.

Gold climbed 1.4% to $5,080 an ounce, just below a recent record, while silver surged 6.4% to $110.60 an ounce.

Christopher Louney, commodity strategist at RBC Capital Markets, said the rally reflected “the frenetic nature of uncertainty coupled with a weaker dollar.”

US equity futures were slightly higher, with Nasdaq futures up 0.6%, as investors prepared for earnings from major technology firms including Microsoft, Apple and Tesla.

Wall Street closed higher overnight for a fourth straight session, with the S&P 500 and Nasdaq hitting their highest levels in more than a week.

Micron to invest $24 billion in Singapore amid AI-driven demand

Separately, Micron Technology said it plans to invest about $24 billion in Singapore over the next decade as it expands manufacturing capacity to meet surging demand for memory chips driven by artificial intelligence.

The Boise, Idaho-based company said it has broken ground on an advanced wafer fabrication facility within its existing NAND manufacturing complex in Singapore.

The project represents a planned investment of 31 billion Singapore dollars ($24.41 billion), with wafer output expected to begin in the second half of 2028.

Micron said the new fab will help it “address growing market demand for NAND technology driven by the rapid expansion of AI and data-centric applications.”

The company already manufactures about 98% of its top-end NAND flash memory in Singapore, according to the country’s Economic Development Board.

The investment follows Micron’s earlier announcement of an advanced packaging facility for high-bandwidth memory at the same site, representing about $7 billion in spending through the end of the decade.

Micron has also recently raised its outlook for memory demand growth and announced plans to buy a Taiwanese chip-making site for $1.8 billion.

Automakers weigh lifeline for bankrupt supplier First Brands

Ford and General Motors are in advanced talks to provide a potential financial lifeline to First Brands Group, the bankrupt US car-parts maker, as it races to secure funding to keep operations running while it seeks a buyer, reported Financial Times.

According to the report, the two automakers are among a group of customers negotiating a short-term financing arrangement that would involve paying in advance for parts they are scheduled to receive.

The structure would inject much-needed liquidity into First Brands, helping it continue operating through its Chapter 11 proceedings.

While the deal is not yet finalized, one person described the talks as near the “finish line.”

The intervention highlights First Brands’ importance to automotive supply chains.

The Ohio-based company, which filed for bankruptcy in September with about $12 billion in debt, supplies key components to both Ford and GM, including windscreen wiper parts used in Ford’s F-150 pickup.

The F-series trucks account for nearly 40% of Ford’s US sales.

Meta tests paid subscriptions across its apps

In the technology sector, Meta Platforms is preparing to test new subscription models across Instagram, Facebook, and WhatsApp, according to a report from TechCrunch confirmed by a Meta spokesperson.

The company said the subscriptions are designed to “unlock more productivity and creativity” by offering exclusive features and expanded AI capabilities, while keeping core services free.

Each app will have a distinct set of paid tools, and Meta said it will test a variety of bundles.

A central part of the strategy involves scaling Manus, an AI agent platform Meta acquired in December for a reported $2 billion, and expanding access to AI-powered tools such as its Vibes short-form video experience.

The subscriptions will be separate from Meta Verified, which is aimed primarily at creators and businesses.

The move could help Meta diversify revenue beyond advertising, though the company faces the challenge of subscription fatigue as consumers juggle multiple paid services.

Meta said it plans to gather user feedback as it rolls out the subscriptions in the coming months.

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Global power sector emissions showed rare stability in 2025 as sharp gains in clean energy across Asia began to outweigh rising coal use elsewhere.

New data, as reported by Reuters, suggest that China and India, the world’s largest coal consumers, both recorded declines in electricity-related emissions in the same year for the first time in more than five decades.

The shift helped neutralise a jump in US power emissions, keeping overall pollution from electricity generation largely flat despite rising global demand.

Researchers say the turning point reflects the pace at which renewables are being added in the two Asian economies, altering long-term emissions trends that have dominated the past decade.

Clean energy shifts in Asia

According to a report published this month by the Centre for Research on Energy and Clean Air, states Reuters, power sector emissions in China and India fell simultaneously in 2025, a first in 52 years.

The two countries had accounted for 93% of the growth in global carbon dioxide emissions from electricity generation in the decade through 2024.

China’s power sector emissions dropped by 40 million tonnes of carbon dioxide equivalent, or 0.7%, over the year.

In India, emissions from utilities declined by 38 million tonnes, or 4.1%, in the 11 months to the end of November.

The estimates were compiled by energy think tank Ember using monthly government data.

The reductions came after both countries added record volumes of new clean power capacity last year.

Experts say those additions were sufficient to meet rising electricity demand without further increases in coal-fired output, marking a break from previous years when demand growth translated directly into higher emissions.

Global emissions held in check

The declines in China and India offset a sharp rise in US power emissions during 2025.

US utilities recorded an increase of 55.7 million tonnes of carbon dioxide equivalent over the year after coal-fired power output jumped 13.1%.

That pushed power plant emissions up 3.3%, the fastest annual rise this century.

Despite the US increase, global power sector emissions remained broadly stable. China, India, and the US together account for around 60% of emissions from electricity generation, which itself represents roughly 35% of total greenhouse gas pollution linked to climate change.

Over the decade to 2024, power plant emissions rose by an average of 3.4% a year in China and 4.4% in India, while falling 2.4% annually in the US.

The 2025 data suggests those long-standing trends are starting to diverge.

Coal trends by country

Longer-term expectations for coal use vary widely across major economies.

The International Energy Agency said in December that coal consumption in China is set to decline gradually over the current decade.

That shift is expected to help emissions from power generation plateau as renewables and other low-carbon sources continue to expand.

India’s trajectory looks different. While record renewable additions and modest electricity demand growth helped limit coal use in 2025, the IEA expects coal to remain central to India’s power mix.

Even with a decline in coal-fired generation this year, the agency anticipates a moderate increase in coal consumption driven by steadily rising electricity demand.

In the US, the IEA forecasts coal demand to fall by 6% through 2030 as higher costs weigh on consumption.

This is expected despite policy incentives from President Donald Trump’s administration and a slowdown in coal plant closures.

What it means for climate targets

The simultaneous fall in power emissions in China and India highlights how rapidly expanding clean energy can change global emissions patterns.

While coal still plays a significant role in all three major power markets, the data suggests that renewables’ growth in Asia is beginning to cap global pollution from electricity generation, even as coal use fluctuates elsewhere.

Researchers say sustained investment in clean power will be key to determining whether 2025 marks a temporary pause or a longer-term shift in emissions linked to climate change.

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BAE Systems share price jas done well in the past few months, moving from a low of 1,588p in December to a high of 2,160p. It then pulled back to the current 1,973p. This article explores why the BA stock may pull back after forming an island reversal and a bearish engulfing pattern.

BAE Systems share price technical analysis 

The daily timeframe chart shows that the BA stock has remained under pressure in the past few days, moving from a high of 2,159p on January 19 to the current 1,973p.

It has formed a series of risky chart patterns, pointing to more downside in the coming weeks. For example, it formed a shooting star pattern on January 19. This pattern is made up of a long upper shadow and a small body.

The stock has formed a bearish engulfing pattern, which is characterized by a big red candle that follows and fully covers a small bullish one. This pattern also leads to a big reversal over time.

Most importantly, the stock has formed an island reversal pattern, which happens after an asset jumps and forms a gap. In this case, this gap happened on January 7 as geopolitical risks rose following Donald Trump’s arrest of Nicholas Maduro.

The two lines of the MACD indicator have formed a bearish reversal pattern and are pointing downwards. Also, the Relative Strength Index (RSI) has moved from the overbought level at 84 to the current 55.

Therefore, the most likely scenario is where the BAE Systems share price continues falling as sellers continue filling the gap, a move that will bring it to the key support level at 1,900p, which coincides with the highest point in October last year.

BAE Systems chart | Source: TradingView

BAE Systems’ business is doing well and has major catalysts 

The bearish outlook for the BAE Systems stock price is based on its technicals. Its fundamentals show that the company is doing well as demand for military equipment in the United States and Europe rise.

Donald Trump has called for defense spending to jump from the current $1 trillion a year to $1.5 trillion, a figure that is much higher than other countries combined. While such a move will hurt America’s finances, it will benefit defense contractors, of which BAE Systems is one of the biggest ones.

Trump has also pushed NATO member countries to boost their defense spending to 5% of their GDP from the current 2%. Such a move will likely lead to more demand for BAE Systems equipment over time.

Index, the most recent results showed that the company’s sales are growing. Its sales rose from £13.4 billion in the first half of 2024 to £14.6 billion, while its adjusted EBIT moved to £1.6 billion from the previous £1.4 billion.

The company ended that period with a backlog of £75 billion pounds and a pipeline of £180 billion. This growth will come from its diverse revenue sources across key industries like electronic systems, air, maritime, cyber, and intelligence, and platforms & services.

At the same time, the company continues to return funds to investors. It returned £1.5 billion to investors through a combination of dividends and share buybacks. 

The next key catalyst for the BAE Systems share price will be its earnings, which will come out on February 18. Analysts expect the results to show that its revenue will be £31 billion, while its underlying EBIT will be over £3.3 billion.

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BT Group share price has remained in a tight range in the past few months as investors assess the recent developments and their impact on its business. It was trading at 182p on Tuesday, a few points below the year-to-date high of 189.45p. So, what next for the shares?

BT Group is facing major headwinds 

BT Group, a top telecom company, is facing major headwinds as competition in the industry rises and its business segment woes continue.

The company’s competition from popular companies like Vodafone, which merged with Three, Virgin Media, and TalkTalk.

Its business segment has been a major disappointment, with its revenue continuing to weaken because of its legacy voice business. The most recent results showed that the segment’s revenue dropped by 2% in the half year to £2.58 billion, continuing a trend that has been going on for years.

BT Group’s other business has continued to slow as woes in its broadband business continued. Its broadband users have been falling, with the management estimating that it had over 900,000 losses last year, which the management attributed to competition and a weak market.

The company’s consumer business continued to weaken, with its revenue falling by 3% to over £4.6 billion, while its international segment revenue dropped by 9%.

The management, led by Alison Kirby, has taken measures to offset the ongoing weakness in its business. She is cutting costs, exiting its unprofitable businesses, and increasing its focus on the UK.

For example, the management recently sold its US federal unit to 22nd Century Technologies as it sought to simplify its business.

City analysts believe that its business continued slowing down in the third quarter of last year. The most recent consensus shows that its upcoming results will show that its sales dropped by 2.1% in the third quarter to £5.07 billion, while its EBITDA dropped by 1.1% to £2.08 billion.

BT Group’s annual revenue will come in at £19.8 billion, down by 3.4%, while its EBITDA retreated to £8.2 billion.

The ongoing slowdown will likely continue slowing down in the coming years as competition from other companies and customer losses in its broadband business continues.

BT Group share price technical analysis 

BT Group stock price chart | Source: TradingView 

The daily timeframe chart shows that the BT Group stock price crashed from a high of 215p in August last year to a low of 170p on November 25.

It then started moving upwards, forming an ascending channel and reaching a high of 188p on January 22nd. This was its highest level since September 30th last year.

BT stock price remains above the Supertrend indicator and the 50-day Exponential Moving Average (EMA).

Therefore, the most likely scenario is where the stock resumes rising, potentially to the key resistance level at 200p. This view will be confirmed if it moves above the upper side of the channel.

On the other hand, a move below the lower side of the ascending channel will invalidate the bullish outlook and point to more downside, potentially to the key support level at 170p, which is about 7% below the current level.

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Chinese sportswear firm Anta has agreed to acquire a significant stake in Germany’s Puma for $1.79 billion, becoming the largest shareholder in the maker of some of the world’s most recognisable athletic footwear.

The deal marks a fresh push by Anta to expand its global footprint while offering Puma a potential boost in its efforts to revive growth.

Anta plans to purchase a 29.06% stake in Puma from the Pinault family, founders of French luxury group Kering, in an all-cash transaction.

The Chinese company will acquire 43.01 million Puma shares at 35 euros each, a sizeable premium to the stock’s last closing price of 21.63 euros.

The transaction follows months of market speculation over a possible stake sale in Puma, which has been undergoing a strategic reset since former Adidas executive Arthur Hoeld took over as chief executive in 2025.

Puma searches for momentum after tough year

Puma has faced a challenging operating environment over the past year, with its shares coming under pressure from weaker demand, elevated inventories, and higher costs.

The company was also hit by the fallout from US President Donald Trump’s tariff policies, which added strain to global supply chains and consumer sentiment.

The German group has been working to refresh its product offering and streamline operations in an attempt to regain ground lost to larger rivals Nike and Adidas, while also fending off competition from fast-growing brands such as New Balance and Hoka.

In October, Puma announced plans to cut a further 900 jobs as part of an expanded cost-reduction programme.

The company has said it aims to return to growth from 2027 as it rolls out a broader brand-reset strategy.

Deal to help Anta become a globalised business, revive Puma in China

“We believe Puma’s share price over the past few months does not fully reflect the long-term potential of the brand,” Ding Shizhong, Anta’s chair, said in a statement.

“We have confidence in its management team and strategic transformation.”

The stake sale is expected to help Puma deepen its presence in mainland China, one of the world’s largest and most competitive sportswear markets.

Anta operates extensive distribution and brand-building networks across China, which could support Puma’s local growth ambitions.

For Anta, China’s largest sportswear company, the deal builds on its efforts to become a more globalised business.

The group competes directly with Nike and Adidas in its home market and has increasingly looked overseas for expansion opportunities.

Anta has a track record of acquiring and repositioning Western sports and lifestyle brands.

It owns labels including Fila and Jack Wolfskin and is also the largest shareholder of New York-listed Amer Sports, whose portfolio includes Wilson, Peak Performance, and Atomic.

The company said Puma was complementary to its existing brand lineup and could strengthen its international competitiveness.

Anta has been expanding across Southeast Asia, North America, and Europe, and said the Puma investment would further enhance its presence and brand recognition globally.

Anta shares rose as much as 3.4% in early Hong Kong trading before paring gains to 1.4%.

Mixed views from analysts

Analysts offered differing views on the deal’s implications.

Citigroup said Anta’s strong post-acquisition execution record gave it confidence in the group’s ability to revitalise Puma’s business.

DBS Group Research said the investment was unlikely to materially affect earnings in 2025 and 2026 but would strengthen Anta’s long-term global positioning.

It added that Anta can capture strong market share in Europe while “creating opportunity to expand Puma’s presence in China and Asia.

Jefferies analysts were more cautious, warning of dilution risks and potential strain on Anta’s management resources.

“We already felt that the Anta brand was facing challenges stemming from strategy missteps, and this acquisition may further sap its management resources,” they wrote in a note.

They also noted challenges in refreshing Puma’s brand image in China, where it is already well known.

Anta said it would fund the acquisition using internal resources and plans to seek board representation at Puma, while ruling out a full takeover.

The transaction is expected to close by the end of 2026.

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Micron Technology is expanding its manufacturing base in Singapore as global memory markets come under growing strain from AI-driven demand.

The US-based chipmaker said it will commit around $24 billion to expand wafer manufacturing at an existing NAND complex, adding capacity at a time when supply across several memory segments remains tight.

The investment will add about 700,000 square feet of cleanroom space to the site.

Cleanrooms are highly controlled environments used in semiconductor fabrication to minimise contamination risks.

Micron expects production of NAND memory at the expanded facility to begin in the second half of 2028, extending the company’s long-term manufacturing presence in Southeast Asia.

Pressure on memory supply

NAND memory is a core component in personal computers, servers, and smartphones, but demand has intensified as artificial intelligence and data-centric workloads scale rapidly.

AI training and inference require vast volumes of memory, increasing pressure across the supply chain and reshaping production priorities for chipmakers.

To manage these pressures, Micron and its competitors have been adjusting output strategies.

Memory producers, including Samsung Electronics and SK Hynix, have also raised production in response to shortages.

Even so, supply has struggled to keep pace with demand, particularly as manufacturers prioritise advanced memory products tied to AI.

Micron’s manufacturing operations in Singapore form part of a broader Asian production network that also spans China, Taiwan, Japan, and Malaysia.

The latest expansion reinforces Singapore’s role as a central hub within that network, supporting both current output and longer-term capacity planning.

High-bandwidth memory focus

Alongside the NAND expansion, Micron is building a $7 billion advanced packaging facility in Singapore to produce high-bandwidth memory, a type of dynamic random-access memory used in AI applications.

The plant is located within the same manufacturing complex and is expected to contribute meaningfully to Micron’s HBM supply in 2027.

The industry-wide shift towards high-bandwidth memory has tightened supply elsewhere. As manufacturers allocate more capacity to HBM to serve AI customers, other memory products have faced shortages.

Some estimates suggest these shortfalls could persist through late 2027, underscoring the difficulty of balancing different memory lines within finite manufacturing capacity.

Micron has said that integrating HBM production into its Singapore footprint could create operational synergies between NAND and DRAM manufacturing.

At the same time, the company plans to manage the pace of expansion at the new facility based on market demand.

Jobs and ecosystem impact

The newly announced NAND expansion is expected to create around 1,600 jobs in fab engineering and operations.

These roles will incorporate AI, robotics, and smart manufacturing systems, reflecting the growing automation of semiconductor fabrication.

The hiring follows the addition of about 1,400 roles linked to the high-bandwidth memory plant already under development at the site.

Singapore has positioned itself as a key destination for advanced semiconductor manufacturing through incentives and long-term industrial policy.

Singapore Economic Development Board said the expansion would strengthen the local semiconductor ecosystem and further anchor the country as a critical node in the global chip supply chain.

Market response

Investors responded positively to Micron’s announcement.

Shares of the company rose more than 4% in premarket trading.

The Singapore investment highlights how memory manufacturers are recalibrating production strategies as AI reshapes the market.

While the additional capacity will not come online until 2028, the scale of Micron’s commitment signals confidence in sustained demand for memory technologies across data centres, consumer devices, and next-generation computing applications.

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US President Donald Trump has made housing affordability a centrepiece of his economic agenda, recently announcing policies designed to increase homeownership.

From restricting institutional investors from buying residential properties to urging “Fannie Mae” and “Freddie Mac” to buy billions in mortgage-backed securities, the administration has leaned on aggressive measures to ease costs.

However, these efforts are unlikely to deliver lasting relief to the housing market, Jake Krimmel, a senior economist at Realtor, told CNBC in an interview this week.

Why Trump’s initiatives are short-term fixes only

Krimmel isn’t particularly excited about Trump’s recently announced housing initiatives as they’re “short run” only – not long-term solutions to the deeper structural issues troubling that market. 

According to him, the ban on institutional investors or encouraging government-backed entities to absorb mortgage securities may boost demand in the near-term, but these policies won’t address the fundamental shortage of housing supply.

“I’d love to see more potentially long-run supply side solutions, not just ones to stimulate demand,” the economist explained, adding that without a significant increase in construction, affordability will remain a challenge.

Demand-side policies can temporarily stimulate activity, but they risk inflating prices even further, leaving first-time buyers hardly any better off in the long run.

Federal policy alone won’t solve the crisis

On “Squawk Box”, Jake Krimmel acknowledged the fragmented nature of the US housing market as another major challenge.

“Housing market isn’t a national market,” he argued, pointing to massive differences in affordability and supply-demand dynamics across regions.

Northeast and Midwest – for example – face tight inventories and constrained construction, while the South and West grapple with affordability pressures despite more active building.

Therefore, federal policies alone can’t uniformly resolve these divergent crises.

Local governments must step in with tailored initiatives like zoning reforms, incentives for builders, or “subsidies” for affordable housing projects.

Without regional alignment, national measures risk being blunt instruments that fail to address the nuanced realities of local housing markets.

Rate cuts could unlock inventory – but at a cost

One of President Trump’s most vocal demands has been for lower interest rates, pressuring the Federal Reserve to act.

Mortgage rates currently hover around 6.2%, and a drop to 5.5% could meaningfully shift the market.

“If rates come down, that’s going to push some first-time home buyers into the market for sure,” Krimmel noted.

Lower borrowing costs would ease the “lock-in effect,” encouraging homeowners with higher-rate mortgages to sell and freeing up inventory.

However, the benefits come with risks: cheaper financing could reignite price growth, undermining affordability gains.

So, the net impact would depend on whether increased liquidity outweighs the upward pressure on home values.

All in all, Trump’s housing policies may spark short-term relief, but lasting affordability demands deeper supply-side and local reforms.

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New car sales in the European Union rose modestly last year, driven by growing demand for electric vehicles, though overall volumes remain well below levels seen before the pandemic, industry data showed.

According to the European Automobile Manufacturers’ Association (ACEA), EU car registrations increased by 1.8% in 2025 to 10.8 million vehicles.

Sales picked up pace at the end of the year, rising 5.8% in December to 963,319 units, as electric and hybrid models continued to attract buyers.

Despite the improvement, the industry body cautioned that the recovery remains fragile, with sales still lagging historical norms amid high prices, tighter household budgets, and lingering supply chain challenges.

Electric cars take a larger slice of the market

Battery-electric vehicles accounted for a growing share of the EU market, with nearly 1.9 million registrations in 2025.

That represented 17.4% of total sales, up from 13.6% a year earlier.

Hybrid electric cars remained the most popular option, capturing 34.5% of the market.

By contrast, the combined share of petrol and diesel vehicles fell sharply to 35.5%, down from 45.2% the previous year.

Petrol car sales declined by 18.7% overall, with the steepest falls recorded in France, where registrations dropped 32%, followed by Germany, Italy and Spain.

Growth in electric vehicle sales was strongest in the bloc’s largest markets.

Germany posted a 43.2% rise, while the Netherlands, Belgium and France also recorded double-digit increases.

Together, these four countries accounted for nearly two-thirds of all battery-electric car sales in the EU.

Tesla loses ground as BYD surges

The shift toward electric vehicles has reshaped competition among manufacturers, with Tesla suffering a sharp decline in Europe.

The US carmaker’s sales fell 31.9% in December to 21,485 vehicles, cutting its market share to 2.2%.

Over the full year, Tesla sales dropped 37.9% to 150,504 units.

Tesla lost ground to China’s BYD, whose European sales nearly tripled in December to 18,008 vehicles.

BYD more than tripled its annual sales to 128,827 cars, lifting its market share to 1.9%.

BYD overtook Tesla as the world’s largest electric carmaker in 2025, benefiting from aggressive pricing and a broad product lineup.

Tesla has also faced challenges following the rollback of US electric vehicle subsidies and emissions incentives, as well as consumer backlash linked to Elon Musk’s political positions.

Mixed fortunes across Europe’s wider car market; JLR sells one Jaguar in Dec

Across Europe as a whole, including the EU, the European Free Trade Association and the UK, car sales rose 7.6% in December to 1.2 million vehicles and increased 2.4% over the year to 13.3 million, the ACEA said.

Jaguar Land Rover continued to struggle after a cyber attack in September that forced factory shutdowns.

December sales fell 25.3% to 4,332 vehicles, while full-year sales declined 17% to 53,161 units.

The company sold just one Jaguar in December as it ended production of internal combustion engine models, marking its transition to an all-electric future.

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A long-awaited trade agreement between India and the United States is moving closer to completion, even as tariff frictions and geopolitical crosscurrents continue to shape negotiations.

India’s petroleum and natural gas minister Hardeep Singh Puri told CNBC that talks with Washington have reached a very advanced stage, adding to a busy day for New Delhi that also included the announcement of a fresh trade pact with the European Union.

The developments underline India’s push to position itself as an open trading partner across multiple blocs.

At the same time, they highlight the complexity of balancing parallel negotiations with the EU and the US, particularly as Washington maintains elevated tariffs on Indian exports linked to energy purchases from Russia.

With both deals unfolding against the backdrop of shifting global trade alliances, the next steps are likely to be closely watched by markets and policymakers.

Negotiations move closer

Hardeep Singh Puri told CNBC that discussions with Washington are progressing well and are nearing completion.

He indicated that officials directly involved in the negotiations have conveyed that talks are deep into their final stages, suggesting momentum despite the absence of a fixed signing timeline.

While no deadlines were outlined, the message from New Delhi was that dialogue remains constructive and that patience is required as complex trade agreements often take time to conclude.

India’s open trade stance

Indian officials framed the US talks within a broader commitment to multilateral trade.

This stance was reinforced earlier on Tuesday when India announced a free trade agreement with the EU.

Under the deal, the European Commission estimates that EU goods exports to India will double by 2032 as New Delhi removes or lowers tariffs on 96.6% of EU exports.

The tariff cuts will apply to a broad range of products, including automobiles, industrial goods, wine, chocolates, and pasta.

In exchange, India’s Ministry of Commerce and Industry said the European Union will eliminate or reduce tariffs on 99.5% of imports from India over seven years.

India has positioned this approach as mutually beneficial for its partners.

Officials suggested that openness to trade strengthens India’s appeal as a negotiating counterpart, not only for the EU but also for Washington and other economies seeking market access and supply chain diversification.

Tariffs and political pressure

Despite ongoing talks, the US continues to apply punitive tariffs on imports from both India and the EU.

European exporters currently face a 15% duty on shipments to the US, while India has been hit harder with a 50% levy.

The higher tariff on Indian goods is partly linked to New Delhi’s continued purchases of Russian oil.

These measures add an element of uncertainty to the negotiations.

There is also unease in New Delhi over how US President Donald Trump may respond to India’s newly announced EU trade agreement.

US criticism of EU deal

While the US President Donald Trump hasn’t responded to the trade deal, the US administration had already criticised the EU for the deal.

Treasury Secretary Scott Bessent publicly questioned the EU’s decision to proceed with a trade agreement with India, pointing to what he described as unequal sacrifices between Washington and its European partners.

“The US has made much bigger sacrifices than Europeans have. We have put 25% tariffs on India for buying Russian oil. Guess what happened last week? The Europeans signed a trade deal with India,” Bessent said in an interview with ABC News on Sunday.

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Investors have been loading up on small-cap stocks as they take a breather from the larger, possibly overvalued artificial intelligence (AI) names in recent weeks.

This shift in sentiment that experts have dubbed the “Great Rotation” has pushed the Russell 2000, a benchmark index that represents the US small-cap stocks, up some 8% since the start of this year.

Still, Jeffrey Hirsch, a senior editor at the “Stock Trader’s Almanac”, believes the small-cap index will push meaningfully higher from here in the months ahead.

What’s driven small-cap stocks up in 2026

Russell 2000’s year-to-date performance sure makes you believe that good things do often come in small packages.

The small-cap index has rallied nearly “double digits” this month, printing new highs, and leaving the S&P 500 trailing far behind as large-cap names continue to wrestle with keeping pace.

According to Jeffrey Hirsch, several forces are driving this surge.

For one, investors are expecting the Federal Reserve to lower interest rates further in its upcoming meetings – a move that tends to benefit smaller companies more directly because of their heavier reliance on borrowing.

Additionally, seasonal factors are playing a role as well. Hirsch pointed to the so-called “January Effect”, where investors scoop up smaller names at the start of the year, especially ones that were beaten down by tax-loss selling in the final quarter.

Why Russell 2000 could push further up this year

In his recent report, Jeffrey Hirsch also projected continued upside in the Russell 2000 index ahead.

Historical data suggests small-cap stocks often outperform in February – with the aforementioned index averaging a modest gain while the SPX tends to tread water.

Moreover, in midterm election years like 2026, the advantage is even more pronounced.

Portfolio manager Daniel Lysik echoed his view, saying beyond seasonality, fundamentals are starting to look more attractive as well.

Small-cap earnings growth has finally edged past that of larger companies – a milestone not seen in over three years.

Lysik also highlighted valuations: small caps are trading at a deep discount relative to their larger peers, with a forward P/E multiple roughly 30% lower.

This could attract “value-seeking” investors who believe the market has overlooked smaller firms.

Bottom line

All in all, sentiment is shifting. After a year dominated by AI giants, many traders are eager to diversify into areas of the market that haven’t yet been bid up to extremes.

If rate cuts materialise and economic growth remains steady, small-cap stocks could be positioned to capture outsized gains.

For investors, the message is clear: don’t overlook the smaller names.

They may not carry the same headline-grabbing weight as the tech titans, but in 2026, the underdogs of the equity market are proving they can deliver big results.

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