US retailers are scrambling to adjust their strategies as tariff rules shift again, adding fresh uncertainty to consumer spending and profit outlooks in 2026. Key Takeaways Tariff rate raised to 15% after Supreme Court ruling Retailers warn of “policy whiplash” complicating planning Companies reluctant to raise prices amid cautious consumers Middle East tensions add new shipping and fuel cost risks Tariff Landscape Shifts Again The US government lifted temporary import levies to 15% , up from 10%, after the Supreme Court struck down emergency duties. Retailers say the bigger problem isn’t just higher tariffs — it’s unpredictability. Key Point: Policy volatility, not just tariff levels, is the main risk for retailers. Companies can plan for higher costs — but not for rules that change week to week. Who Is Most Affected? Abercrombie & Fitch Factored the 15% tariff into forecasts Estimated 70 basis-point hit (~US$40 million) Previously projected US$90 million impact Best Buy Heav...
Morgan Stanley has shifted to a more cautious stance on Asian equities, cutting its overweight call on India as escalating Middle East tensions threaten energy supply chains and earnings outlooks.
Key Takeaways
Morgan Stanley downgrades India from overweight to equal-weight
Asia seen as highly exposed to Middle East oil and LNG disruptions
Strait of Hormuz risks could pressure earnings and valuations
Foreign investors have pulled US$1.3b from India since the war began
Why Morgan Stanley Is Turning Cautious
Morgan Stanley strategists warned that Asian markets remain heavily dependent on Middle Eastern energy flows — including crude oil, refined products and LNG.
A prolonged disruption in the Strait of Hormuz could:
Lift oil and LNG prices
Trigger earnings downgrades
Raise regional risk premiums
Slow economic growth across energy-importing economies
Key Point: The bank believes markets are too complacent about supply-chain risks from the Iran war.
India Downgraded on Energy Vulnerability
India was cut from overweight to equal-weight.
Why?
High exposure to potential Qatari LNG disruptions
Vulnerability to oil price spikes
Limited AI exposure compared with Taiwan and South Korea
Elevated valuations
Morgan Stanley suggests global investors may wait for tech-cycle peaks in Korea and Taiwan before reallocating toward India.
Capital Outflows Accelerate
Since the war began:
About US$1.3 billion has exited India
South Korea saw US$1.6 billion outflows this week
Taiwan recorded roughly US$7.9 billion in withdrawals
Despite India’s limited AI exposure, geopolitical risk is dominating flows.
Oil Remains the Core Risk
Crude Oil continues to trade near elevated levels amid supply uncertainty.
A sustained supply shock could:
Reignite inflation pressures
Delay rate cuts across Asia
Weigh on export-driven economies
Trigger broader global slowdown fears
Overall theme: Rising energy risks are forcing global strategists to reduce exposure to vulnerable Asian markets, with India now losing its overweight status.
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