Stocks extend gains on rate-cut bets
The broad-based S&P 500 index and the tech-heavy Nasdaq extended gains after reaching new summits on Tuesday.
Tokyo's Nikkei index followed suit on Wednesday, hitting a record as it closed 1.3% higher. European stock markets also finished in the green.
Investors have worried about the impact that US President Donald Trump's tariffs will have on US inflation and growth in the world's biggest economy.
But official figures showed Tuesday that the US consumer price index (CPI) remained steady at 2.7% in July, unchanged from June.
Investors shrugged off data showing that core CPI -- a measure of inflation that strips out volatile food and energy prices -- accelerated in July to the fastest pace in six months to 3.1%.
'Even as core CPI was accelerating, markets were reassured because the tariff impact on inflation didn't look so obvious this time,' Deutsche Bank analysts said in a note.
Markets could have reacted negatively as core inflation is usually the data point favoured by the Fed to make decisions on interest rates, said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.
'Investors instead increased September cut expectations, thinking that imported goods inflation remained lower than feared as companies continued to absorb tariff costs,' she said.
Trump has repeatedly demanded that the independent Fed cut rates and lambasted its chief, Jerome Powell, over the issue.
The central bank, which will make its next interest-rate decision in September, has kept borrowing costs unchanged for now.
The dollar slumped against other major currencies as the prospect of lower interest rates reduced its appeal to foreign investors.
Investor focus was also on a summit in Alaska on Friday between Trump and Russian leader Vladimir Putin on the three-year-old Ukraine war.
And oil prices fell more than 1% as the International Energy Agency raised its forecast for supply growth in 2025 and 2026 -- leaving the world with a surplus -- after OPEC+ decided to raise production.
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Daily Tribune
6 hours ago
- Daily Tribune
Stocks extend gains on rate-cut bets
Stock markets rose yesterday, with Wall Street building on the previous day's record highs after steady US inflation data fuelled hopes that the US Federal Reserve will cut interest rates. The broad-based S&P 500 index and the tech-heavy Nasdaq extended gains after reaching new summits on Tuesday. Tokyo's Nikkei index followed suit on Wednesday, hitting a record as it closed 1.3% higher. European stock markets also finished in the green. Investors have worried about the impact that US President Donald Trump's tariffs will have on US inflation and growth in the world's biggest economy. But official figures showed Tuesday that the US consumer price index (CPI) remained steady at 2.7% in July, unchanged from June. Investors shrugged off data showing that core CPI -- a measure of inflation that strips out volatile food and energy prices -- accelerated in July to the fastest pace in six months to 3.1%. 'Even as core CPI was accelerating, markets were reassured because the tariff impact on inflation didn't look so obvious this time,' Deutsche Bank analysts said in a note. Markets could have reacted negatively as core inflation is usually the data point favoured by the Fed to make decisions on interest rates, said Ipek Ozkardeskaya, senior analyst at Swissquote Bank. 'Investors instead increased September cut expectations, thinking that imported goods inflation remained lower than feared as companies continued to absorb tariff costs,' she said. Trump has repeatedly demanded that the independent Fed cut rates and lambasted its chief, Jerome Powell, over the issue. The central bank, which will make its next interest-rate decision in September, has kept borrowing costs unchanged for now. The dollar slumped against other major currencies as the prospect of lower interest rates reduced its appeal to foreign investors. Investor focus was also on a summit in Alaska on Friday between Trump and Russian leader Vladimir Putin on the three-year-old Ukraine war. And oil prices fell more than 1% as the International Energy Agency raised its forecast for supply growth in 2025 and 2026 -- leaving the world with a surplus -- after OPEC+ decided to raise production.
Daily Tribune
6 hours ago
- Daily Tribune
‘Stop production': Small US firms battered by shifting tariffs
TDT | Manama Washington When US President Donald Trump announced tariffs on almost all trading partners in April, Ben Knepler contacted the factory in Cambodia producing his company's outdoor furniture. 'Stop production,' he ordered. The announcement involved a 10-percent levy on imports from most partners, set to rise further for many of them. For Cambodia, the planned duty was a staggering 49 percent. 'That night, we spoke to our factory,' Knepler told AFP. 'We literally cannot afford to bring our own product into the US with that kind of tariff.' The decision was even more painful for Knepler and his Pennsylvania-based company, True Places, given that he had previously shifted production of his outdoor chairs to Cambodia from China, following tariffs on Chinese imports imposed by Trump during his first presidency. 'We were facing 25-percent tariffs in China, and there were zero-percent tariffs in Cambodia,' Knepler recalled. It took him a year to move the massive equipment and molds to Cambodia only to see another steep levy. With Trump's 'reciprocal' tariff hikes taking effect last Thursday, these Cambodia-made chairs face a lower -- though still significant -- 19 percent duty. 'Wheel of misfortune' Knepler's experience echoes that of many US companies producing everything from yo-yos to clothing abroad, after years of offshoring American manufacturing. To cope, businesses use various strategies. Some pass on the new costs as a surcharge to customers. Others halted imports when duties reached prohibitive levels, hoping Trump would strike bilateral trade deals that would make their businesses viable again. Trump frames his tariffs as paid for by other countries, touting tens of billions in revenue this year -- but firms contest this description. 'We make the tariff payments when the product comes into the US,' Knepler stressed. 'Before we sell it, we're the ones who pay that tariff.' Now saddled with hundreds of thousands of dollars in debt he took on to relocate the company's production to Cambodia, Knepler worries if his business will survive. He likens the rapid policy changes to spinning a 'wheel of misfortune,' resulting in a new tariff each time. Over four months this year, the planned tariff rate on Cambodian exports has gone from 0 to 49 percent, to 10 percent, to 36 percent, to 19 percent, he said. 'No one knows what it's going to be tomorrow,' he added. 'It's impossible to have any kind of confidence in what the rate will be in three- or four-months' time.' Economists warn that tariffs could fuel inflation and drag on growth. EY chief economist Gregory Daco noted that the duties effective Thursday raise the average tariff rate to 17.6 percent from 2.8 percent at the start of the year -— the highest level since the early 1930s. While Trump lauds the limited effects his duties have had on US prices so far, experts say tariffs take time to filter through to consumers. Many of Trump's sweeping levies also face legal challenges over his use of emergency economic powers. Price hikes The global tariffs are especially hard to avoid. Barton O'Brien said he accelerated production and borrowed money to bring in as much inventory as possible before Trump took office. On the election campaign trail, the Republican leader had floated a 60-percent tariff on imports from China, where O'Brien makes most of his products. The Maryland-based veteran selling dog harnesses and other accessories rented a container to ship as many products as he could before Trump's new tariffs would take effect. 'I had dog life jackets in the bathroom,' he told AFP.
Daily Tribune
6 hours ago
- Daily Tribune
How India has become the world's smartphone making powerhouse
TDT | agencies India is now the United States' biggest supplier of smartphones. New data shows that New Delhi has surpassed Beijing as Washington's top supplier of smartphones. What made this possible? Apple shifting its operations to India in the backdrop of the Covid-19 pandemic and President Donald Trump's ongoing tariff wars. But what happened and why? How did India overtake China as the US' top supplier of smartphones? Let's take a closer look: What happened? Data from research firm Canalys showed that India's smartphone shipments to the US increased by a whopping 240 per cent in the second quarter of 2025. These phones now comprise around 44 per cent of all smartphones sent to the US. Last year, that figure was at just 13 per cent, Meanwhile, China's share of smartphones sent to the US declined to 25 per cent. This is a major shift from the second quarter of 2024, when China comprised 61 per cent of smartphones sent to the US. Canalys analyst Sanyam Chaurasia said, 'India became the leading manufacturing hub for US-sold smartphones for the very first time in Q2 2025, largely driven by Apple's accelerated supply chain shift to India amid an uncertain trade landscape.' iPhone exports from the US to India hit a high in March – just before Trump announced the reciprocal tariffs on US trading partners. Trump has imposed a 50 per cent tariff on India, a 30 per cent tariff on China while the two countries negotiated trade deal and a 20 per cent tariff on Vietnam. India has exported over 24 million iPhones across the world in 2025 – 78 per cent of which have gone to the United States. India sent 21.3 million smartphones to the US between January and May 2025 – more than what it sent last year. Smartphone exports from India to the US have skyrocketed 182 per cent to $9.35 billion in 2025. Tamil Nadu, which houses Apple suppliers such as Foxconn, Pegatron, and Tata Electronics, is the hub of iPhone production in India. Apple is making its bas models such as the iPhone 16 and iPhone 15 in India. However, it is important to note that though the tech giant has begun assembling some iPhone Pro models in India, it remains dependent on China for its iPhone Pro models to the United States. Samsung and Motorola have also increased sending handsets from India. However, they are doing so on a fast smaller scale than Apple. Chaurasia said Motorola, like Apple, had its core manufacturing base in China, while Samsung kept its in Vietnam. Incidentally Vietnam has also grown its share of the US market to 30 per cent. Union minister Ashwini Vaishnaw confirmed the development on Sunday. Vaihnav added that electronics manufacturing in India is now estimated at Rs 12 lakh crore. Vaishnav, inaugurating metro projects in Bengaluru, said India's electronic production has increased six-fold over the past 11 years. He said electronic exports have surged eight-fold to Rs 3 lakh crore, which reinforced India's position as the world's second-largest mobile phone manufacturer. 'Our electronic production has grown six times in the last 11 years. Today, electronics manufacturing has touched Rs 12 lakh crore. Electronic exports have increased by eight times… Today, it has grown to Rs 3 lakh crore. India has become the second-largest manufacturer of mobile phones in the world,' Vaishnaw said. Government data shows that India had just two mobile manufacturing units in 2014 – that number is over 300 today. A decade ago, a mere 26 per cent of mobile phones sold in India were made locally. Today, 99.2 per cent of phones sold in India are made locally. The value of mobile phone manufacturing industry rose from Rs 18,900 crore in FY14 to Rs 4,22,000 crore in FY24. The Union Minster Jitin Prasada earlier told the Lok Sabha earlier that the production linked incentive (PLI) scheme meant for mobile phone manufacturing attracted a total investment of Rs 12,390 crore. 'The PLI Scheme for LSEM has already attracted a cumulative investment of INR 12,390 crore, led to a cumulative production of Rs 8,44,752 crore with exports of Rs 4,65,809 crore and generated additional employment of 1,30,330 (direct jobs) till Jun'25,' the minister said. He said India's mobile import demand decreased by 0.02 per cent in 2024-25 from 75 per cent in 2014-15. 'PLI Scheme for Large Scale Electronics Manufacturing has significantly impacted the mobile manufacturing sector in India particularly in transforming India from a net importer to a net exporter of mobile phones. Bharat is now the second largest mobile manufacturing country in the world,' the minister said. What do experts say? That US smartphone makers are clearly in the mood to diversify. Experts say that issues over tariffs and trade rules have resulted in vendors front-loading inventory – which means buying far more inventory than usual and changing their sourcing plans. India's increasing role as a manufacturing base for global smartphone brands shows it is becoming a bigger part of the phonemakers' plans for both low-cost and high-end models. However, it must be noted that the smartphone market in US increased just 1 per cent in the second quarter of 2025. In fact, iPhone shipments decreased 11 per cent from the previous year. However, Samsung's shipments increased by a massive 38 per cent. Motorola also saw a two per cent bump. The other popular models were Google and TCL.
