S&P 500 recedes from record highs as tariffs sour sentiment
Trump late on Thursday ramped up his tariff assault on Canada, saying the US would impose a 35% tariff on imports next month and planned to impose blanket tariffs of 15% or 20% on most other trading partners.
The S&P 500 eased from a record high the day before, with caution prevailing after Trump on Thursday imposed 50% tariffs on Brazil and as the European Union braced for a possible letter from Trump with details on fresh tariffs.
"The increased rhetoric around tariffs, what we've seen this week regarding Brazil and Canada, is certainly elevating the anxiety level," said Michael James, an equity sales trader at Rosenblatt Securities.
"People had become a little more accustomed to the lack of negative tariff headlines, and we've kind of been reminded that the tariff picture is still there."
Shares of Nvidia NVDA.O hit an intraday record high.
Drone makers AeroVironment AVAV.O and Kratos Defense & Security Solutions KTOS.O jumped after US Defense Secretary Pete Hegseth ordered a surge in drone production and deployment.
TARIFFS AFFECTING MAJOR US COMPANIES
Investors will soon turn their attention to the second-quarter reporting season, with a focus on how Trump's on-again, off-again tariffs are affecting major US companies.
Analysts on average expect S&P 500 companies to increase their second-quarter earnings by 5.7%, year over year, with big gains from tech companies and declining profits in energy, consumer staples and consumer discretionary, according to LSEG I/B/E/S.
"We believe expectations are a bit low for S&P 500 earnings.
Much of the second quarter was marked with tariff and trade issues, and that may have caused some dislocations in earnings," said Michael Landsberg, chief investment officer, Landsberg Bennett Private Wealth Management.
Levi Strauss & Co. LEVI.N jumped after the apparel seller raised its annual revenue and profit forecasts and beat quarterly estimates.
Meta Platforms fell after Reuters reported that the company is very unlikely to offer more changes to its pay-or-consent model, increasing the risk of fresh EU antitrust charges and hefty daily fines.
Kraft Heinz KHC.O closed higher after the Wall Street Journal reported the company is preparing to break itself up as the packaged food maker grapples with persistent weakness in demand for its higher-priced brands.
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Straits Times
2 hours ago
- Straits Times
EU holds off on US tariff countermeasures for now to pursue talks
Sign up now: Get ST's newsletters delivered to your inbox FILE PHOTO: European Commission President Ursula von der Leyen looks on during a joint news conference with Canadian Prime Minister Mark Carney and European Council President Antonio Costa, during an EU-Canada summit in Brussels, Belgium June 23, 2025. REUTERS/Gonzalo Fuentes/File Photo BRUSSELS - The European Union said on Sunday it would extend its suspension of countermeasures to U.S. tariffs until early August and continue to press for a negotiated settlement, after U.S. President Donald Trump ratcheted up his trade war on the bloc. Trump said on Saturday he would be imposing a 30% tariff on most imports from the EU from August 1, though his deadline gave the EU, like other targeted countries, time to hammer out agreements that could lower the threatened tariff rate. Ursula von der Leyen, head of the EU's executive Commission which handles trade policy for the 27 member states, said the bloc would maintain its two-track approach: keep talking and prepare retaliatory measures. "We have always been very clear that we prefer a negotiated solution. This remains the case, and we will use the time that we have now," von der Leyen told a press conference, adding that the bloc would extend its halt on countermeasures until August. Von der Leyen's decision to resist immediate retaliatory measures points to the European Commission's desire to avoid a spiralling tit-for-tat escalation in the trade war while there remains a chance of negotiating an improved outcome. White House economic adviser Kevin Hassett said Trump had seen some trade deal offers and thinks they need to improve, adding that without that, he would proceed with the threatened tariffs on Mexico, the EU and other countries. "These tariffs are real if the president doesn't get a deal that he thinks is good enough," Hassett told ABC's This Week programme. "But you know, conversations are ongoing, and we'll see where the dust settles." Top stories Swipe. Select. Stay informed. 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French President Emmanuel Macron said the Commission needed more than ever to "assert the Union's determination to defend European interests resolutely", and that retaliation might need to include so-called anti-coercion instruments. Germany's economy minister called for a "pragmatic solution" immediately after Trump's latest threat, though on Sunday the country's finance minister said the EU should be ready to take firm action if talks failed. "If a fair negotiated solution does not succeed, then we must take decisive countermeasures to protect jobs and companies in Europe," Finance Minister Lars Klingbeil, also vice chancellor in the ruling coalition, told Sueddeutsche Zeitung newspaper. While the EU has held back from retaliating against the U.S. in the months since Trump hit the bloc with tariffs, it has readied two packages that could hit a combined 93 billion euros of U.S. goods. A first package, in response to U.S. levies of 50% on imported steel and aluminium that would hit 21 billion euros in U.S. goods was suspended in April for 90 days to allow time for negotiations. The suspension had been due to expire on Monday before the extension was announced. A second package in retaliation against Trump's "reciprocal" tariffs has been in the works since May and was set to target 72 billion euros of U.S. goods. These measures have not been made public and the final list requires approval by member states. ANTI-COERCION INSTRUMENT Von der Leyen said on Sunday that the use of the EU's Anti-Coercion Instrument was not yet on the table. The instrument allows the bloc to retaliate against third countries that put economic pressure on EU members to change their policies. "The (anti-coercion) instrument is created for extraordinary situations, we are not there yet," she said. Possible retaliatory steps could include restricting EU market access to goods and services, and other economic measures related to areas including foreign direct investment, financial markets and export controls. In a sign of the EU's desire to strike deals with more trading partners at a time of deepening uncertainty in trans-Atlantic relations, von der Leyen said a political agreement had been reached to advance an EU-Indonesia trade deal. France's cheese producers warned of the damaging consequences of a 30% tariff for the local dairy industry, which exports nearly half its produce, including to the United States. "It's a new environment we will have to get used to - I don't think this is temporary," Francois Xavier Huard, CEO of dairy association FNIL, told Reuters. REUTERS
CNA
4 hours ago
- CNA
EU and Indonesia announce 'political agreement' on trade deal
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Straits Times
4 hours ago
- Straits Times
Deal or no deal? EU faces critical decision in response to Trump's latest tariff salvo
Sign up now: Get ST's newsletters delivered to your inbox Mr Trump's shock threat to slap 30 per cent tariffs on the EU from Aug 1 is a severe blow to Europe's confidence. – Trade ministers from the European Union's 27 member states are meeting in Brussels on July 14 to face a critical choice. They can decide to persist in efforts to reach a trade deal with the United States. Or they could respond to US President Donald Trump's latest threats to impose massive tariffs on European exports by imposing their own punitive tariffs against American products.
