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U.S. stock investors are bracing for continued market volatility as trade tensions and a weakening dollar create uncertainty. Despite a brief reprieve after Trump eased some tariffs, concerns about economic damage persist amid ongoing trade battles, particularly with China.

Wall Street saw gains as big banks started first-quarter earnings season. The week had market swings due to the US-China trade war. Federal Reserve assurances helped. JPMorgan Chase, Morgan Stanley, and Wells Fargo reported good profits. Inflation data showed cooling, but consumer sentiment dropped. The Dow, S&P 500, and Nasdaq all closed higher. Citi lowered its S&P 500 year-end target.

European stocks closed lower on Friday, concluding a volatile week marked by escalating trade tensions and fluctuating U.S. tariff policies. The STOXX 600 experienced its third consecutive weekly decline as investors grappled with uncertainty surrounding the economic impact of the trade war.

RBI s draft guidelines on partial credit enhancement (PCE) are poised to revolutionize corporate financing, particularly for infrastructure projects. By reducing capital requirements and increasing the PCE limit to 50%, the move will enable companies to access bond markets at lower rates.

About 60% of commercial bank s loans are pegged to external benchmarks, like the policy repo rate that was lowered the second time in as many months to 6%. For private sector banks, the share of external benchmarks lending rate (EBLR) loans-or advances linked to repo rate-is 85.9%, while for public sector banks it is 44.6%. Effectively, the margins of private banks are expected to be impacted more than PSU banks.

The Sensex returns in rupee terms have been between 190% and 1,500% in past three bullish eight-year cycles since 1984. In bearish periods, their returns dropped to the range of 20-50%

Some expect a slightly deeper cycle, with expectations of a terminal rate at 5% by December 2025 as the Reserve Bank of India surprised the market with a change in its stance to accommodative from neutral , along with a downgrade in growth forecasts, "decisive improvement" in the inflation outlook and commitment to surplus liquidity.

Private sector companies have seen their spreads widen, whereas government-owned banks and state-owned companies have largely remained steady, with yields on their dollar bonds remaining flat over the past week following the tariff announcement. However, relief came from tariff pause for some issuers like Biocon Biologics 6.67% due 2029 rising 4 points today, though still lower by over 8 points from start of the month.

The selloff is the latest sign of the power of government bond markets to act as a restraint on policymakers, while talk of a return of so-called bond vigilantes has risen in recent years.