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Tax cuts and AI investments expected to boost US economy in 2026Risks include weakening labour market and elevated inflationFed policy a question, though new Fed chair expected to push for rate cutsA see-saw year for the US economy in 2025 looks set to give way to a stronger 2026 thanks to tailwinds from President Donald Trump's tax cuts, ‌less uncertainty around tariffs, the ongoing artificial intelligence boom and a late-year run of interest-rate reductions from the Federal Reserve.Among ‌the biggest drivers of a pickup in ‍growth, economists say, are fatter tax refunds and smaller tax withholdings on paychecks that are expected to provide a lift to consumer spending, the backbone of the American economy.Trump's ⁠One Big Beautiful Bill also gives companies a range of ⁠credits and tax breaks, including the ability to fully write off expenses from investments, that may fuel capital spending beyond data centres and ‍other AI-related areas."The boost from fiscal stimulus alone could add one-half percent or more to first quarter GDP growth," wrote KPMG chief economist Diane Swonk.At the same time, the impact of Trump's tariffs on prices is projected to peak in the first half of the year. If price pressures then recede, as Fed policymakers increasingly believe they will, wages will have more room to outpace inflation, bolstering household finances further.Meanwhile business spending on the infrastructure that powers AI, a key component of economic growth in 2025, looks poised to continue as mega technology firms such as Amazon and Google parent Alphabet promise more investments ahead.The upshot: a better ‌outlook for businesses stuck for much of this past year in a "low-hire, low-fire" mode as they sought to weather Trump's disruptive trade policies and aggressive immigration crackdown."We expect fading policy uncertainty, the boost from tax cuts and the recent loosening of monetary policy to mean the economy strengthens in 2026," ‍said Oxford Economics analyst Michael Pierce.A stronger ⁠economy was a core ‌promise of Trump's presidential election campaign, but as he began his second term in the White House early this year the economy shrank amid the rollout of his unexpectedly aggressive tariffs. The average US import levy shot to nearly 17% in Trump's first year from less than 3% at the end of 2024, according to Yale Budget Lab.Growth rebounded in the second quarter as the contours of his trade policies became clearer and businesses and households began to adjust. It accelerated further in the third quarter to a 4.3% annualised pace as Americans, particularly those with higher incomes who benefited from the runup in the stock market, increased spending and companies poured money into AI.Economists expect fourth-quarter growth to slow substantially, reflecting the impact of the six-week federal government shutdown that began October 1, but with the reopening that drag will reverse in the new year."Growth in 2025 has been resilient despite a substantial drag from trade and immigration policy," Nomura economists wrote. "Now these headwinds are abating at the ​same time fiscal and monetary policy are becoming stimulative."There ‌are many risks: A weakening labour market, still-elevated inflation, and a central bank deeply divided over which of those duelling problems to focus on.Meanwhile Trump is poised to pick a new ⁠Fed chair to take over when Jerome Powell's term ends ‍in May. Whoever he picks is universally expected to push for lower interest rates.This year the US job market steadily slowed, with monthly job gains down sharply from what they were a year ago and the unemployment rate ticking up, key reasons that Fed policymakers did coalesce around a string of interest-rate cuts in the final months of the year. The unemployment rate was 4.6% in November, though economists said the reading was distorted by the lack of data collection during the government shutdown.Stubbornly elevated inflation may limit further rate cuts next year.While ​third-quarter inflation was much more muted than expected, economists say it was not a clear indicator and likely understated real price pressures. Meanwhile it will take months to bear out whether tariff-driven goods inflation will indeed fade as many policymakers now expect.Household concerns over the weaker job market — evident in the latest data from the Conference Board showing a deterioration in consumers' perceptions of the labour market to levels last seen in early 2021 — have some economists predicting families will save rather than spend the extra money from the Trump tax cuts.And while businesses may gain from investment in AI if it helps them do more with fewer people, employees and job-seekers may not benefit in the same way."We expect the unemployment rate to stabilise at 4.5% as hiring picks up on the back of stronger final ⁠demand growth," wrote Goldman Sachs' economist David Mericle. "Further labour market softening is the largest downside risk to our forecast because hiring is starting from a weak place and the promise of AI might restrain it further." 

India and Oman sealed a free trade pact that removes tariffs on key goods and simplifies market access, bolstering New Delhi’s push to expand its economic ties and strategic presence in the Middle East.In a statement announcing the signing of the deal on Thursday, India’s Ministry of Commerce and Industry said the pact “secures unprecedented tariff concessions for India from Oman.” The Gulf state has offered zero-duty access on over 98% of its tariff lines, covering major labour-intensive sectors such as gems and jewellery, textiles, plastics, pharmaceuticals, automobiles and engineering products, the ministry said.New Delhi has agreed to liberalise tariffs on 77.79% of its tariff lines while protecting sensitive sectors such as dairy, tea, coffee and gold and silver bullion, the statement added. Prime Minister Narendra Modi, accompanied by key members of his cabinet, is in Oman for the signing of the agreement.With Washington’s 50% tariff on Indian goods squeezing the country’s exporters, Modi’s government has been accelerating efforts to diversify its trade partners. It finalised a major trade deal with the UK earlier this year — cutting tariffs on goods from cars to alcohol — and is nearing an agreement with the European Union.New Delhi is also trying to strengthen its strategic and economic partnership with nations in the Middle East. The South Asian nation has already signed a free trade agreement with the United Arab Emirates and is in talks with the Gulf Co-operation Countries on a trade deal.This is only the second bilateral trade deal Oman has signed in about two decades. The pact eases mobility for India’s skilled professionals in sectors such as accountancy, taxation and medicine, and provides longer stays for contractual service suppliers, the statement said. It also allows 100% foreign direct investment by Indian firms in major services sectors in Oman through a commercial presence.Although a small economy, Oman is crucial to India given its location in the region. The country sits alongside the Strait of Hormuz, an important oil transit chokepoint through which most of Asia’s crude oil moves.India and Oman began trade-pact negotiations in 2023, and while the FTA underscores growing ties, it is unlikely to deliver a major boost to India’s exports given the relatively small trade volumes. Two-way trade between the countries totalled $10.6bn in 2024–25.Oman is, however, a key energy partner for New Delhi. It was India’s fourth-largest supplier this year, with 99.9% of imports comprising liquefied natural gas, according to Kpler data. India, in turn, mainly ships farm goods, mineral oils, steel, petroleum products, chemicals and pharmaceuticals to Oman.The trade agreement “will allow our exports to be more competitively priced in each others’ economies,” Commerce and Industry Minister of India Piyush Goyal said in Oman earlier on Thursday, adding that Indian business would find Oman as a “strategic gateway” to the Gulf, Africa and West Asia.New Delhi has also fast-tracked talks on FTAs with several nations — including New Zealand, Chile, Peru — to make up for the loss of access to the US market. 

Battery prices are forecast to drop next year, though it’ll be a smaller dip than 2025 due to high costs of raw materials and tariffs.The average price for a battery pack is expected to fall 3% next year to $105 per kilowatt-hour, according to a new BloombergNEF survey. The report attributes the dip to a glut of manufacturing capacity in China, increased competition and an ongoing shift to products that use lower-cost and safer lithium-iron phosphate technology.That projected drop isn’t as large as this year’s, though: Battery prices fell by 8% to $108 per-kilowatt-hour in 2025, the report said. That decrease came despite higher battery metal prices due to supply chain risks at Chinese lithium mines and restrictions on cobalt exports from the Democratic Republic of Congo that sent prices climbing 124% between January and October.“Cutthroat competition is making batteries cheaper every year,” said Evelina Stoikou, head of the battery technology team at BNEF. “This is an important moment for the industry, as record-low battery prices create an opportunity to lower EV costs and accelerate the deployment of grid-scale storage to support renewables integration around the world.”Efforts to keep lowering the price of batteries, which are the most costly part of electric vehicles, is helping accelerate the global adoption of electric automobiles, with China leading the way. The country’s annual EV sales are set to outpace the number of all vehicles sold in the US — including internal combustion models — according to BNEF.Cheaper battery packs are also boosting the deployment of stationary energy storage systems that are increasingly backstopping intermittent solar and wind power as well as providing a resource to help meet rising demand from data centres. BNEF projects that global energy storage installations are projected to more than double over the next decade.Continued investment in research and development, manufacturing efficiency and the expansion of supply chains will support further improvement in battery technology and additional cost reductions, BNEF said. New technologies such as silicon and lithium metal anodes, solid-state electrolytes, new cathode materials and cell manufacturing processes will also play a role in driving down future prices, according to the survey. 

China signalled it will maintain economic support but refrain from ramping up stimulus next year, underscoring a shift from defending against US tariffs to securing growth in the longer term.The leadership will “flexibly and efficiently” use interest rate and reserve requirement cuts to ensure sufficient liquidity, and maintain a “necessary” level of budget deficit and government spending in 2026, according to an official readout released Thursday following the conclusion of the Central Economic Work Conference.The language of the meeting suggests a desire to keep stimulus measured after China emerged from a trade war with the US largely unscathed, thanks to booming exports to the rest of the world. It shows policymakers are content with current policies, allowing them to stick to a manufacturing-led growth strategy even as they take steps to boost consumption.“Economic policy was in an emergency mode a year ago due to external uncertainties. This year, policies are focusing more on the longer term,” said Ding Shuang, chief economist for Greater China and North Asia for Standard Chartered Plc. “There’s no reason for policies to be more expansionary.”Attended by senior officials including President Xi Jinping, the conference sets economic policy priorities for the coming year. In a sign of greater recognition of several growth headwinds, officials vowed to stop the sharp slump in investment, steady the deteriorating housing market and stabilise the dwindling new births.The latest policy signals come as the world’s No 2 economy is set to conclude a surprisingly resilient year. The strength in exports propelled economic growth, with the annual goods trade surplus exceeding $1tn for the first time.Other headwinds are also growing. Fixed-asset investment saw an unprecedented collapse in the second half of 2025, deepening worries over languishing domestic demand. To counter that, officials pledged to increase central government’s budget spending on investment projects.China may find boosting infrastructure investment a more worthwhile endeavour, given the waning impact of consumer subsidies on retail sales. The conference mentioned the subsidy policy will be “optimised,” suggesting limited space for its expansion in size. Some economists predict the programme may be extended to cover services spending, as the sector receives increasing government attention.Meanwhile, officials promised to “pay due attention” to addressing local government fiscal strains and advance efforts to resolve local debt risks in an active but “orderly” way. Multiple measures will be taken to reduce the operational debt risks of local government financing vehicles, they added.Another major concern is growing troubles in the property market, after state-backed developer China Vanke Co shocked markets with a proposal to delay bond repayment.The conference laid out a clear destocking mandate for the sector, pledging to “control new supply.” Policymakers explicitly encouraged the acquisition of unsold commercial housing to be converted into affordable housing. Previously, Bloomberg reported that China was considering new measures such as providing new homebuyers mortgage subsidies for the first time nationwide.“The emphasis on property stabilisation is a pleasant surprise,” said Michelle Lam, Greater China economist at Societe Generale SA. “Of course we still need to know how forceful the property measures are but it shows policymakers are mindful about the downside risks. So that should help to alleviate the downtrend in property prices.”Policymakers reiterated a long-held pledge to maintain the basic stability of the yuan exchange rate. That signals an aversion for any sudden or significant moves, despite growing calls for China to strengthen the yuan to reduce its massive trade surplus and rebalance toward consumption.The latest reiteration of a “more proactive” fiscal policy comes after the augmented deficit expanded to 8.7% of gross domestic product in the first three quarters of this year — the highest level in data back to 2010.Many economists expect Beijing to set the official budget deficit at around 4% of GDP, the same as in 2025, which was the highest level in more than three decades.Monetary policy would target a “reasonable recovery in prices,” according the conference, acknowledging the drag caused by weak domestic demand and entrenched deflation.Despite the pledge on monetary easing, the People’s Bank of China has in fact turned more cautious with policy this year. Its policy interest rate cut has disappointed markets, and in a November report it downplayed the slowdown in loan growth and signalled a more patient approach with the economy’s transition.A year ago, the work conference also pledged to adopt rate cuts and RRR reductions — which lower the amount of cash banks must keep in reserves and free up money for lending — the first mention of the tools in such occasions in at least a decade. The PBoC ended up cutting rates and RRR about six months after the meeting.“The meeting did mention rate cuts, but in terms of the actual extent of it, markets don’t really have high expectations,” said Zhang Zhiwei, chief economist at Pinpoint Asset Management. “I don’t think this meeting will significantly boost people’s expectations for rate cuts next year.” 

Tariff rollback includes beef, tomatoes, bananas amid inflation concernsTrade deals with Argentina, Ecuador, Guatemala, El Salvador to eliminate tariffsDemocrats criticize Trump for inflation linked to tariffs (Adds Trump comments, paragraphs 3, 17, 18, details on order throughout, industry reaction paragraphs 12-15)US President Donald Trump has rolled back tariffs on more than 200 food products, including such staples as coffee, beef, bananas and orange juice, in the face of growing angst among American consumers about the high cost of groceries.The new exemptions — which took effect retroactively at midnight on Thursday — mark a sharp reversal for Trump, who has long insisted that the sweeping import duties he imposed earlier this year are not fueling inflation."They may in some cases" raise prices, Trump said of his tariffs when asked about the move aboard Air Force One on Friday evening. But he insisted that overall, the US has "virtually no inflation." Democrats have won a string of victories in state and local elections in Virginia, New Jersey and New York City, where growing voter concerns about affordability, including high food prices, were a key topic.Trump also told reporters aboard Air Force One that he would move forward with a $2,000 payment to lower- and middle-income Americans that would be funded by tariff revenues next year sometime. "The tariffs allow us to give a dividend if we want to do that. Now we're going to do a dividend and we're also reducing debt," he said.The Trump administration announced framework trade deals on Thursday that, once finalised, will eliminate tariffs on certain foods and other imports from Argentina, Ecuador, Guatemala and El Salvador, with US officials eyeing additional agreements before year's end.Friday's list includes products US consumers routinely purchase to feed their families at home, many of which have seen double-digit year-over-year price increases. It includes over 200 items ranging from oranges, acai berries and paprika to cocoa, chemicals used in food production, fertilizers and even communion wafers.The White House, in a fact sheet on the order, said it came on the heels of "significant progress the President has made in securing more reciprocal terms for our bilateral trade relationships." It said Trump decided certain food items could be exempted since they were not grown or processed in the US, and given the conclusion of nine framework deals, two final agreements on reciprocal trade, and two investment deals.Ground beef, as of the latest available data for September, was nearly 13% more expensive, according to Consumer Price Index data, and steaks cost almost 17% more than a year ago. Increases for both were the largest in more than three years, dating back to when inflation was nearing its peak under Trump's predecessor, Democrat Joe Biden.Although the US is a major beef producer, a persistent shortage of cattle in recent years has kept beef prices high.Banana prices were about 7% higher, while tomatoes were 1% higher. Overall costs for food consumed at home were up 2.7% in September.The tariff exemptions won praise from many industry groups, while some expressed disappointment that their products were excluded from the exemptions."Today’s action should help consumers, whose morning cup of coffee will hopefully become more affordable, as well as US manufacturers, which utilize many of these products in their supply chains and production lines," FMI-Food Industry Association president Leslie Sarasin said in a statement.Distilled Spirits Council president Chris Swonger said that excluding spirits from the European Union and Britain "is yet another blow to the US hospitality industry just as the critical holiday season kicks into high gear." "Scotch, Cognac and Irish Whiskey are value-added agricultural products that cannot be produced in the US," Swonger added.Asked if further changes were planned, Trump told reporters aboard Air Force One, "I don't think it'll be necessary." "We just did a little bit of a rollback," he said. "The prices of coffee were a little bit high, now they'll be on the low side in a very short period." NEW FOCUS ON AFFORDABILITY Trump has upended the global trading system by imposing a 10% base tariff on imports from every country, plus additional specific duties that vary from state to state.Trump has focused squarely on the issue of affordability in recent weeks, while insisting that any higher costs were triggered by policies enacted by Biden, and not his own tariff policies.Consumers have remained frustrated over high grocery prices, which economists say have been fueled in part by import tariffs and could rise further next year as companies start passing on the full brunt of the import duties.The top Democrat on the House of Representatives Ways and Means Committee, Richard Neal, said the Trump administration was "putting out a fire that they started and claiming it as progress." "The Trump Administration is finally admitting publicly what we've all known from the start: Trump's Trade War is hiking costs on people," Neal said in a statement. "Since implementing these tariffs, inflation has increased and manufacturing has contracted month after month."

The dollar steadied on Tuesday, as US President Donald Trump softened his tone on tariffs toward China, and hopes grew for a possible meeting with his Chinese counterpart, which gave a boost to expectations of easing tensions between the world's two largest economies. The euro remained below USD 1.16, trading at USD 1.1566. The British pound fell 0.06 percent to USD 1.3328, while the New Zealand dollar fell again, touching a six‑month low at USD 0.57145. The dollar index, which measures the performance of the US currency against a basket of currencies, rose 0.04 percent to 99.34 points. The Australian dollar remained almost unchanged at USD 0.6516, whereas the Japanese yen declined 0.2 percent to 152.57 per dollar.

Business confidence among major Japanese manufacturers improved for the second consecutive quarter after a deal to lower US tariffs, but the outlook was clouded by caution over the impact of the levies, the Bank of Japan's Tankan survey showed Wednesday. The sentiment index measuring confidence among companies such as those in the auto and electronics sectors rose to 14 in September from 13 three months earlier, falling slightly short of the average market forecast of 15. The index for large nonmanufacturers, including the service sector, was unchanged from the previous survey in June at 34, as they benefited from passing higher costs on to customers but were pressured by rising prices that prompted consumers to tighten their belts. Looking ahead, however, big manufacturers' sentiment is projected to worsen to 12, and that of large nonmanufacturers is expected to fall to 28, according to the central bank's quarterly survey. The latest Tankan was the first released since US President Donald Trump eased duties on Japanese goods after a bilateral trade deal in July, with the auto tariff reduced to 15 percent from 27.5 percent in mid-September. Among manufacturers, sentiment in the motor vehicle sector climbed to 10 from 8 in June, but is forecast to return to 8. Confidence among shipbuilding and heavy machinery makers jumped to 36 from 27, as they were able to pass rising costs on to customers through higher prices, the Bank of Japan (BOJ) said.

QNB confirmed that the beginning of 2025 was accompanied by cautiously positive expectations for global trade growth, supported by relative stability in the world economy. However, new shifts in US trade policy have significantly affected the global economic landscape. The bank's weekly report noted that the decision of the United States on Apr. 2 to impose broad tariffs including duties of no less than 10 percent on imports and higher rates on selected countries has led to rising concerns about supply chain disruptions, increased uncertainty, and the potential escalation of trade disputes. The report stated that, as a result, the World Trade Organization (WTO) has forecast a contraction in global trade volumes for the current year, an occurrence that is rare and typically seen only in exceptional circumstances such as the 2009 global financial crisis and the 2020 COVID-19 pandemic. The report explained that economic indicators since April 2025 have shown notable resilience in the global economy despite existing challenges. It projected that global trade growth in 2025 will be modest compared to previous periods, but will remain far beyond the most pessimistic scenarios. This outlook is supported by three main factors. The first factor highlighted in the report is that leading indicators, particularly from highly integrated Asian economies such as Japan, South Korea, Singapore, Taiwan, and Vietnam, reflect strong export activity, signaling a recovery in global trade. These markets recorded an average annual growth rate of 6 percent in 2024, with the rate accelerating to 12 percent in the last four months of the year despite trade tensions. The report also pointed to Chinese export growth of 6 percent during the same period, reflecting sustained global demand. In this context, the report stated that investor expectations regarding the earnings of transportation-sector companies serve as an important indicator of future global trade trends. The Dow Jones Transportation Average in the United States, which includes companies involved in air, land, and sea transport as well as rail and delivery services, reached its lowest annual growth level in mid-2024 before rebounding into positive territory, signaling a possible expansion of trade.This improvement reflects a decline in pessimism even amid continued trade shocks. The gap between strong Asian export growth and the more cautious profit expectations of transport companies was attributed to the increase in early shipments to the US market in anticipation of further tariff threats. The second factor concerns a significant decrease in the likelihood of large-scale global trade wars despite the rise of US protectionist policies. The report explained that the conclusion of US negotiations with key trading partners, including the United Kingdom, Japan, and the European Union, has clearly reduced uncertainty and lowered the probability of expanding tariff measures. At the same time, most global economies are moving toward greater trade integration through multilateral agreements, which reduces the negative impact of protectionist policies and strengthens the stability of the global trading system. The third factor relates to monetary policy. The report considered that waves of monetary easing adopted by major central banks are expected to provide additional support for global trade growth in the coming period. It noted that the US Federal Reserve is expected to cut its benchmark interest rate by 125 basis points next year, bringing it down to 3.25 percent by the end of 2026, in an effort to reduce borrowing costs and stimulate economic activity. Similarly, the European Central Bank has lowered its key rate by 200 basis points since mid-2024 to settle at 2 percent.The report emphasized that interest rates are a decisive factor in supporting investment and boosting consumer spending, which are two key pillars of global trade, particularly given that the United States and the euro area together account for about 40 percent of global GDP. The bank concluded its report by affirming that the outlook for 2025 indicates a tangible improvement in the prospects for global trade compared to the more pessimistic scenarios that followed Washington's announcement of broad tariffs. It pointed out that a combination of positive economic indicators, accommodative monetary policies, and the signing of new trade agreements is helping to limit the repercussions of geopolitical and economic tensions and to support the stability of the global trading system in the upcoming period.

The European Bank for Reconstruction and Development (EBRD) lifted its 2025 growth forecast for the first time in more than a year but warned that the effects of tariffs and war will weigh on growth in 2026. The report, which covers economies in emerging Europe, Central Asia, the Middle East and Africa, raised the 2025 growth outlook slightly to 3.1%, but noted a growing divergence as emerging European countries' growth lagged expansion elsewhere.The 2025 estimate excludes the development bank's newest members — Iraq and six Sub-Saharan African countries, including Nigeria, Kenya and Ghana — but they are included elsewhere in the report for the first time.Rising debt, resurgent inflation, prolonged wars and tariffs were menacing all EBRD economies, EBRD chief economist Beata Javorcik warned.While US imports from those countries had grown in the first half of the year, that was driven by the first quarter, before tariffs hit, she said.

Indian companies are betting on small towns and villages to sustain growth at a time the third-largest Asian economy is bracing for pain from US’s punishing 50% tariffs.Businesses from biscuits makers to building materials suppliers underscored the buoyant rural demand in investor calls for their June quarter earnings, adding that low inflation and the prospect of a good harvest will ensure the 900mn Indians living outside cities keep spending. Consumption growth in India’s countryside has outpaced that in urban markets for six straight quarters, according to data analytics firm NielsenIQ.Demand in rural India, dominated by its agrarian economy, is a bit more insulated from the impact of the exorbitant US tariffs, making it an important focus area to get growth from, Sudhanshu Vats, managing director at adhesives and paint maker Pidilite Industries Ltd told Bloomberg News.India’s gross domestic production in the three months through June expanded at the fastest pace in more than a year. Private consumption grew 7% on the back of strong rural demand and improvement in agriculture wages.The growth, however, risks hitting a speed-bump after US President Donald Trump doubled the 25% duty on Indian exports from August on more than half of goods shipped to the US — its biggest market. The levies will almost certainly bruise labour-intensive industries such as textiles and jewellery, which are concentrated around large cities.Meanwhile, real rural wages rose at the fastest pace in more than seven years, according to data from Citigroup Inc. The gap between rural and urban monthly per-capita consumption has also narrowed significantly, official figures showed.“We’ve seen very good growth this quarter,” Varun Berry, managing director at Britannia Industries Ltd, told investors last month, despite the global economy going through turbulent times. The bread and cookie maker expects to retain its growth momentum with a focus on India’s rural markets, he said.Pidilite is adding distributors and setting up branded stores in smaller towns, with population of less than 12,000, as well as expanding waterproofing centres and mobile customer support vans, to drive growth.Consumption accounts for more than half of the GDP in the world’s most populous nation, and mass spending in its hinterland is fast catching up with that in cities. Last month, Prime Minister Narendra Modi announced tax cuts that aim to shield the economy from the negative impact of US tariffs.“The timing of GST reforms is apt,” Tanvee Gupta Jain, chief India economist at UBS Securities, said in a note, adding that counter-cyclical policy measures were necessary to counter tariff uncertainties. The tax cuts will boost household consumption over the next two to three quarters, she added.Shares of rural-focused stocks have outperformed broader indexes, suggesting investors see them as a hedge against tariff risks.“We see large volumes of contribution coming from rural segment,” said Nikhil Doda, co-founder of Archian Foods Pvt, which sells a popular cumin-flavoured fizzy drink, Lahori Zeera.The company that competes with Coca Cola Co and PepsiCo Inc, even provides “insulated chill boxes” to rural sellers of its 10-rupees ($0.1) beverage, as most small shops don’t even have a refrigerator. Small towns are a significant contributor to the company’s sales.There is an inclination amid rural consumers to try newer products, according to K Ramakrishnan, managing director for South Asia at consumer research firm, Worldpanel by Numerator. “All the contributing factors to boosting consumption in rural areas are strong for India.”

A spate of inflation data confronts US stock investors in the coming week as markets grapple with fresh uncertainty over tariffs and government bond yields, while equities hover at lofty valuations. The benchmark S&P 500 index closed at a record high on Thursday despite an uneven start to September, which has been the worst month for stocks on average over the past 35 years. Stocks were pulling back on Friday after the monthly US employment report showed job growth weakened in August."September has been known to see a wearing down of the sentiment picture," said Matthew Miskin, co-chief investment strategist at Manulife John Hancock Investments. At the same time, he said, "stocks aren't pricing in a lot of risks right now. They look fully valued."The monthly US consumer price index on Thursday highlights next week's economic releases, with investors focused on signals from the inflation data about the prospects for interest rate cuts and the fallout from tariffs on prices. Following Federal Reserve Chair Jerome Powell's remarks late last month that flagged rising risks to employment, markets have been widely expecting the central bank to lower rates for the first time in nine months at its September 16-17 meeting.Investors bet on even more accelerated easing after the weak jobs report.Fed Funds futures were baking in a 90% chance of a quarter-point rate cut at the meeting, and a roughly 10% chance of a heftier half-percentage point cut, LSEG data as of Friday afternoon showed.Only a CPI number that comes in "egregiously higher" than estimates could dent assumptions of imminent monetary policy easing, said Art Hogan, chief market strategist at B Riley Wealth.About 70 basis points of easing, or nearly three standard cuts, are projected by December, according to the futures data.Recently, "the prospect of the Fed cutting has been the overwhelming factor driving equity sentiment to be more positive," Miskin said. "And so if that reverses, then it could be problematic for equities."Along with CPI, a Wednesday report on producer prices could also reveal impacts from import tariffs. Last month's PPI data showed US producer prices increased by the most in three years in July as the costs of goods and services surged. Tariffs and their economic implications were the main risk facing markets earlier this year, but other factors such as questions over Fed independence and caution about the artificial intelligence trade have been more prominent recently.The issue returned to the fore this week after a US appeals court ruled that most of President Donald Trump's tariffs are illegal. While the Trump administration has asked the US Supreme Court to hear a bid to preserve the sweeping tariffs, the ruling injected fresh uncertainty for markets."It felt as though the fog of trade war was clearing, and now we're just back into the thick of it," Hogan said. "And that doesn't help corporate America make decisions, consumers make decisions, and investors make decisions."The potential of lost tariff revenue exacerbating the US fiscal deficit was one factor investors said may have driven long-dated US government debt yields sharply higher at the start of the week, moves that also followed big jumps in yields in the UK and other regions. While long-dated yields globally have since calmed, their spikes were cited as contributing to stock weakness initially during the week.The 30-year US Treasury yield this week hit 5% for the first time in over a month. That yield level has been "problematic" for risk appetite over the past few years, said Adam Turnquist, chief technical strategist for LPL Financial. The long-bond yield was last around 4.78%, with yields falling broadly on Friday after the jobs data.The S&P 500 was up about 10% so far in 2025, helped recently by a solid second-quarter earnings season. The S&P 500's price-to-earnings ratio climbed to 22.4 times, based on earnings estimates for the next 12 months, a valuation well above its long-term average of 15.9, according to LSEG Datastream."Investors face ongoing threats from trade and tariff unknowns as well as potential economic releases that could ultimately challenge elevated stock valuations," Anthony Saglimbene, chief market strategist at Ameriprise Financial, wrote in a commentary."That said, investors have been navigating those dynamics for months, and stocks have continued to grind higher."

India will roll out a package of measures to help exporters hurt by a surge in US tariffs, Finance Minister Nirmala Sitharaman said Friday.The new US duties slapped on Indian goods last month included a 25% punitive levy over New Delhi’s Russian oil purchases - taking overall duties as high as 50% on a wide range of items from garments and jewellery to footwear and chemicals."The government will come out with something to handhold those who have been hit by 50% tariffs," Sitharaman told CNBC TV18, without going into further detail.The government plans to offer credit guarantees on loans overdue by up to 90 days for small businesses and exporters, Reuters reported earlier, citing government sources.Exporters said labour-intensive sectors such as textiles, jewellery and seafood, particularly shrimp - which all operate on margins of just 3%-5% - have been hit hardest, causing job losses in industrial hubs in Tamil Nadu and Prime Minister Narendra Modi’s home state of Gujarat."Textiles and apparel manufacturers in Tiruppur, Noida and Surat have halted production amid worsening cost competitiveness," S C Ralhan, president of the Federation of Indian Export Organisations (FIEO), said.The tariffs, among the highest imposed by the administration of US President Donald Trump, delivered a serious blow to ties between the two powerful democracies that had in recent decades become strategic partners.Nearly 55% of Indian exports to the US, worth about $48bn, now face a cost disadvantage against rivals from Vietnam, China and Bangladesh, Ralhan said last week ahead of an exporters' meeting with the finance minister.Thousands of workers have already been laid off, exporters have said.