Global market news: US stock market tanks on Trump's tariff worries. Dow Jones crashes 1.23%, Nasdaq nosedives 2.24%
The dollar index, which measures the greenback against major currencies, including the yen and the euro, fell 1.37% to 98.66. The euro was up 1.52% at $1.1589. Against the Japanese yen, the dollar weakened 2.26% to 147.32.
The US President Donald Trump signed an order on Thursday night imposing steep tariffs on 66 countries, the European Union, Taiwan, and the Falkland Islands, to go into effect Aug. 7, after he initially threatened them for April but postponed twice after that until August 1, 2025. The US stock market was also reacting to government reports of a dramatic slowdown in hiring as businesses, investors, and the US Fed operate under a cloud of uncertainty from months of Trump tariff policy news.
Highlighting the reason for the bloodbath in the US stock market, Luke Tilley, Chief Economist at Wilmington Trust, said, "The market is reacting to the possibility of the economy flipping into recession. The weak jobs data is piling on to weak earnings reports and guidance from some corporations."
"The way (the market) is going to interpret (the departures) is in a very dollar-negative way," Juan Perez, senior director of trading, Monex USA, referring to both the Kugler and McEntarfer news.
"No matter what the economic picture in the United States, the one thing that holds the US dollar strong in the eyes of the world is the authority and the independence of the Federal Reserve. Whenever anything comes to put that into compromise, potentially, then that's when the US dollar spirals down."
MSCI's global equities index sold off sharply on Friday, and the dollar took a dive after weaker-than-expected US jobs data fueled economic worries and boosted bets for September US Fed rate cuts. Investors also considered US President Donald Trump's latest tariff announcements and key personnel changes.
US Treasuries were in demand after the Labour Department reported that the US economy added 73,000 nonfarm payrolls last month, below economists' expectations for 110,000. June's job growth was revised sharply lower to 14,000 from 147,000.
After the report, Trump said he ordered his team to fire the US Bureau of Labour Statistics commissioner, Erika L. McEntarfer, who former President Joe Biden had nominated for the role.
The dollar index and US Treasury yields lost ground when the Federal Reserve announced that Governor Adriana Kugler would resign early from her term on 8 August. This caused some investors anxiety at a time when Trump had loudly disagreed with Fed rate policies.
On Thursday, Donald Trump ordered tariffs ranging from 10% to 41% on US imports from several major trading partners. He increased duties on Canadian goods to 35% from 25% for all products not covered by the US-Mexico-Canada trade agreement. He set a 25% rate for India's U.S.-bound exports, 20% for Taiwan's, 19% for Thailand's and 15% for South Korea's.
Mexico, however, got a 90-day reprieve from higher tariffs to allow for deal talks.
Late on Friday, traders were betting on an 87.5% probability for a September rate cut compared with 37.7% on Thursday, according to CME Group's FedWatch tool.
(With inputs from Reuters)
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
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Indian Express
5 minutes ago
- Indian Express
India stays pragmatic amid Trump's tariff blitzkrieg; US moves N-submarines closer to Russia; Canada to recognise Palestinian state
Amid Trump's tirade, India says will protect national interest, closely watches US's renewed closeness with Pakistan and trade deal with China; data shows Indian refiners had begun cutting down on Russian oil imports before Trump's announcement of tariff 'penalty'; the US calls Medvedev's statements 'foolish and inflammatory', moves two Nuclear Submarines closer to Russia; as Canada joins the UK and France in recognising the statehood of Palestine, Israel faces little restraint in its deadly attack in Gaza – here is weekly roundup of key global news. US President Donald Trump's announcements of 25 per cent tariff on India, 'penalty' for its defence and energy imports from Russia, 10 per cent BRICS tariff, and a pointed remark whether Pakistan could 'some day' sell oil to India have sparked concerns about its impact on India's GDP growth, while deepening diplomatic challenges amid the ongoing trade talks. Instead of getting dragged into a tit-for-tat response, India adopts a pragmatic approach, anchored in its longstanding strategic partnership with the US, to weather the tariff blitzkrieg. It reiterated its stance for 'a fair, balanced and mutually beneficial bilateral trade agreement', aligned with national interests and the welfare of farmers, entrepreneurs, and Micro, Small and Medium Enterprises (MSMEs). Nonetheless, Trump's pointed tirade has raised some pertinent questions: How will this affect the ongoing India-US trade talks? How can India withstand Trump's pressure tactic and safeguard its traditional red lines? In what ways could India navigate Trump's unspecified 'penalty' for its defence and energy imports from Russia? Is there room to secure a 10-20 per cent tariff differential with China? And how to look at the US's renewed closeness with Pakistan? Trump's surprise 25% tariff Trump's announcement of the 25 per cent tariff, probably layered on top of the 10 per cent baseline tariff announced in April, comes as a US delegation is expected to visit New Delhi later this month for the sixth round of trade talks. The trade deal is largely bogged down in India's red lines around agriculture and dairy sectors, primarily over concerns around genetically modified crops and dairy imports from animals fed with internal blood meal, a high-protein feed made from animal blood. The US is India's largest trade partner, accounting for around 18 per cent of its goods exports. According to economists, the elevated tariff could reduce India's GDP growth by approximately 0.2 to 0.3 percentage points, with sectors like gems and jewellery, clothing/textiles and phones likely to be hit. Trump also issued a proclamation to impose a 50 per cent universal tariff on semi-finished and derivative copper imports starting from August 1. He has already increased tariffs on steel and aluminium from 25 per cent to 50 per cent. However, India's domestic industry is likely to absorb any decline in the demand from the US – India's third-largest copper export market – given copper's status as a critical mineral and its extensive use across various sectors. Notably, now there is greater receptiveness within India's policy circles to cut tariffs on some industrial goods, and grant concessions in sectors such as public procurement and agriculture, provided these are matched by the other side, like in the case of the UK deal. India has also made preemptive economic concessions after Trump's initial tariff threats. It lowered some import duties and indicated willingness to make more defense and energy purchases from the US to manage the trade gap. Trade data shows that India's oil imports from the US jumped over 270 per cent year-on-year in the first four months of 2025. Nonetheless, Trump also threatened additional penalties on India for its membership in the BRICS, accusing the group of pursuing 'anti-American policies'. However, India has brushed off 'anti-America' rhetoric by saying that de-dollarisation is not its economic, political, or strategic policy and transactions in domestic currencies are intended to de-risk Indian trade. Experts have largely zeroed in on at least two key reasons behind Trump's impulsive policy decisions. One, Trump is testing his familiar strong-arm tactics to browbeat and bully the adversary by imposing high tariffs (as he did with China). Second, some in the Indian establishment feel that the US President has not taken very kindly to Delhi fact-checking Trump's claims on brokering a ceasefire between India and Pakistan. In the meantime, reports of India refusing to consider F-35 fighter jets emerged. But the MEA said that India has a 'strong defence partnership with the US, which has been strengthening over the last several years. However, Trump's latest unilateral measure, subjecting India to a higher tariff than the UK (10 per cent), the European Union, Japan and Korea (15 per cent), Indonesia (19 per cent) or Vietnam (20 per cent), runs counter to the larger story of growing cooperation between the two countries. US-Pakistan reset Hours after announcing the surprise tariffs on India, Trump posted on Truth Social that the US had concluded a deal with Pakistan to develop what he described as the South Asian nation's 'massive oil reserves', and said, 'Who knows, maybe they'll be selling oil to India some day.' In a final tariff announcement on Friday (August 1), Trump gave Pakistan a rate of 19 per cent, down from the original 29 percent. The US-Pakistan reset has raised subtle red flags in Delhi. Indian diplomats point to the deep mistrust caused by Pakistan's strong defence relationship with the US, especially when it got top-of-the-line equipment including F-16 jets. Now, the trade deal with Pakistan and, more specifically, the remark that Pakistan could 'some day' sell oil to India has triggered introspection about India's expectations from the second Trump presidency. Experts argue that while India believed that Trump would rebalance US ties with India – given his predecessor Joe Biden was more favourable towards Pakistan – and stopped short of making pragmatic assessments of the situation – something that Islamabad did. Pakistan seems to have made its recaliberation early on and moved swiftly to invest in the Trump entourage, buying up support. Over the last few months, Pakistan nominated Trump for a Nobel Peace Prize for stopping the India-Pakistan military confrontation, awarded a top military honour to the US Central Command chief, and signed a deal with a US cryptocurrency company. In June, Trump hosted Pakistan Army Chief Field Marshal Asim Munir for lunch at the White House. But it was Pakistan's outreach to the Trump family and the inner circle through investments in the cryptocurrency business that seems to have tilted the scales in its favour, Delhi feels. India watches final tariff on China While India faces the surprise tariff announcement, China, which is currently facing a 30 per cent tariff, is at an advanced stage of trade negotiations with the US. It is understood that Beijing could have a favourable tariff rate and potential waivers on secondary tariffs, including possibly the tariff on account of Russian oil imports and the proposed 10 per cent BRICS tariff. India has been pinning hope on the US to maintain a 10-20 per cent differential with China, which will help New Delhi tide over some of its structural downsides, namely infrastructural bottlenecks, logistics woes, high interest cost, the cost of doing business, corruption, etc. India is closely tracking the effective duty on Chinese products on a landed basis across US ports, particularly in commodity categories, where Indian producers are reasonably competitive, to identify potential export opportunities. However, US and Chinese officials announced no breakthrough after wrapping up two days of discussions in Stockholm on Tuesday, except Beijing saying that the two sides agreed to push for an extension of a 90-day tariff truce struck in mid-May. It is argued that in the case of the US-India trade deal, indications are that the outer time limit, currently pegged at around October from New Delhi's perspective, could be brought forward, if fresh negotiations are positive from India's point of view. Once the interim deal is clinched, if the final US headline tariff on India ends up between 10 per cent and 15 per cent, the tariff points offered to the UK and Japan, respectively, New Delhi would have reasons to be satisfied. But the advantage starts to taper off once the tariff goes over 15 per cent and inches up closer to 20 per cent, as was offered to Vietnam. A trans-shipment clause, of the kind slapped on Vietnam which levies an additional 20 per cent tariff, could be a problem for India too, given that a lot of Indian exports have inputs and intermediate goods in sectors such as pharma, engineering goods and electronics coming in from outside, including China. In a bid to put pressure on Russia to end the war in Ukraine, Trump threatened an unspecified 'penalty' for India for buying Russian oil and weapons, while slapping a secondary tariff of 100 per cent on its oil buyers. Trump said India has always purchased a significant amount of military equipment and energy products from Russia at a time when everyone wants Moscow to stop the 'killing' in Ukraine. He also registered his pet complaint that although India is America's friend, 'we have, over the years, done relatively little business with them because their (India) tariffs are far too high…' The US President went to the extent of calling the economies of India and Russia 'dead', and said, 'I don't care what India does with Russia. They can take their dead economies down together, for all I care' — seen as offensive by many. Nonetheless, India rebutted Trump tirade by asserting that its 'bilateral relationships with various countries stand on their own merit and should not be seen from the prism of a third country. India and Russia have a steady and time-tested partnership.' Similarly, on buying Russian defence equipment, India asserted that the sourcing of 'defence requirements is determined solely by our national security imperatives and strategic assessments.' While India does depend on Russia for the defence supplies, much of it is because of the legacy from the Soviet Union era. Although the dependency is about 60 to 70 per cent, India has, in the past few years, steadily diversified its defence purchases from countries including the US. India's energy imports from Russia shot up following the country's February 2022 invasion of Ukraine, which prompted much of the West to ban Russian crude. In the financial year 2024-25, oil imports from Russia accounted for almost 36 per cent of India's total oil imports. In the meantime, data shows Indian refiners had begun cutting down on Russian oil imports, much before Trump's announcement of tariff 'penalty'. The share of Russian crude in India's oil import basket in July contracted notably to around 33.8 per cent from June's 44.5 per cent. It may be recalled here that New Delhi stopped importing oil from Iran in mid-2019 after sanctions on the Islamic Republic by the Trump administration. As part of its latest 'maximum pressure campaign' action against Iran's energy trade and shipping network, the US this week sanctioned eight India-based companies and five Indian nationals. Frustrated with Russia's intransigence to meet his August 8 deadline to end the war in Ukraine, US President Trump ordered two nuclear submarines to be moved closer to Russia, announced tariffs on its oil buyers, and said details were being hammered out to supply Ukraine with weapons using funds from the North Atlantic Treaty Organization (NATO). Trump's decision to move two Nuclear Submarines closer to Russia came after what he dubbed 'foolish and inflammatory statements' from Dmitry Medvedev, former Russian President and currently deputy chairman of Russia's Security Council. Medvedev told Trump to remember 'how dangerous the fabled 'Dead Hand' can be', a reference to a secretive semi-automated Russian command system designed to launch Moscow's nuclear missiles if its leadership had been taken out in a decapitating strike by a foe. He also called Trump's threat of hitting Russia and buyers of its oil with punitive tariffs 'a game of ultimatums' and a step closer towards a war between Russia and the US, Reuters reported. On Tuesday (July 29), Trump cut short the deadline for Russia, giving it '10 days from today' to agree to a ceasefire in Ukraine or be hit, along with its oil buyers (of which the biggest are China and India), with tariffs. Meanwhile, the US and NATO are also working on a novel approach to supply Ukraine with weapons using funds from NATO countries to pay for the purchase or transfer of US arms, Reuters reported citing three sources familiar with the matter. Nonetheless, Moscow appears unlikely to comply with the US deadline, and has set out its own terms for peace, which Kyiv says amount to demanding its capitulation. Russian President Vladimir Putin said on Friday (August 1) that Moscow hoped for more peace talks with Ukraine but that the momentum of the war was in its favour, signalling no shift in his stance despite a looming sanctions deadline from Washington. During the last peace talks, Russia rejected Ukraine's offer of an unconditional ceasefire and rather demanded its capitulation to its conditions. Moscow currently controls about a fifth of Ukrainian territory and insists Kyiv must relinquish it, envisioning a permanently 'neutral' Ukraine. Kyiv, on the other hand, demands a full Russian withdrawal, alongside NATO membership. Trump deployed the familiar tactic of economic pressure even in Gaza and threatened Canada that signing a US trade deal would now be 'very hard' after Prime Minister Mark Carney announced the plan to recognise a Palestinian state. Canada's move came after France and the UK said they will recognise the Palestinian state at September's UN General Assembly meeting. However, such moves demand closer scrutiny, particularly because Israel has faced little restraint in its deadly strike in Gaza, where international experts say a 'worst-case scenario of famine' is playing out. Two historical agreements merit close attention here: the Sykes-Picot Agreement (1916) and the Balfour Declaration of (1917). The former was a secret agreement between France and Britain involving the division of territories of the Ottoman empire after WWI, while the latter laid the foundation for a 'Jewish national home' in Palestine in exchange for the support of the European Jews for Britain in WWI. It is argued that the creation of an independent State of Israel in May 1948, and its success in fending off five Arab states, meant that the Balfour Declaration's contradictory promises catalysed a conflict that continues to bring devastation to the West Asian region. Over a century later, the UK has said it would move to recognise Palestinian statehood if Israel fails to meet a set of conditions – agreeing to a ceasefire, a two-state solution, and halting its de facto annexation of parts of the occupied West Bank. However, the question remains: if Israel meets all the conditions, will the UK not recognise Palestinian statehood? It wouldn't be an exaggeration to call the chorus from parts of the West more a pressure tactic to push Israel into accepting a ceasefire than a genuine commitment to recognise the state of Palestine. Notably, 147 of 193 UN member states, including India, have formally recognised the State of Palestine. Nonetheless, amid pressure tactics and verbal assurances, the fate of more than 2 million Palestinians in Gaza hangs in the balance, with reports of Israel's continued deadly attacks, starvation deaths, and warning of 'worst-case scenario of famine'. In the meantime, US President Trump's Mideast envoy on Friday (August 1) visited a food distribution site in Gaza operated by an Israeli-backed American contractor, Gaza Humanitarian Foundation (GHF). Media reports have highlighted that aid-seeking Palestinians have been attacked nearly-daily at GHF-operated aid sites, prompting severe criticism from the UN and other Arab nations questioning the credibility of the organisation. In a report issued on Friday, the New York-based Human Rights Watch said GHF was at the heart of a 'flawed, militarised aid distribution system that has turned aid distributions into regular bloodbaths,' Reuters reported. At least 24 people, including 13 aid seekers, have been killed on Saturday (August 2) in Israeli attacks across Gaza, while two more children and an adult have died due to 'famine and malnutrition', bringing the number of deaths from starvation in the territory to 162, including 92 children, Al Jazeera reported citing the enclave's Health Ministry. Israel's war on Gaza has killed at least 60,332 people and wounded 147,643 others. An estimated 1,139 people were killed in Israel during the October 7 attack, and more than 200 were taken captive. Send your feedback and ideas to Ashiya Parveen is working as Commissioning Editor for the UPSC Section at The Indian Express. She also writes a weekly round up of global news, The World This Week. Ashiya has more than 10 years of experience in editing and writing spanning media and academics, and has both academic and journalistic publications to her credit. She has previously worked with The Pioneer and Press Trust of India (PTI). She also holds a PhD in international studies from Centre for West Asian Studies, JNU. ... Read More
Mint
35 minutes ago
- Mint
Shashi Tharoor's cryptic reply on Rahul Gandhi 'endorsing' Trump's 'dead economy' jibe: ‘He has…'
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Hindustan Times
an hour ago
- Hindustan Times
'He has his own reasons': Shashi Tharoor on Rahul Gandhi backing Trump's ‘dead economy' remark
Congress MP Shashi Tharoor on Saturday said he would not comment on Rahul Gandhi's remarks about US President Donald Trump's 'dead economy' comment, but said India's trade ties with America are important and should not be affected. Congress MP Shashi Tharoor during the Monsoon session of Parliament, in New Delhi.(PTI File) Tharoor, who represents Thiruvananthapuram in the Lok Sabha, said, 'I don't want to comment on what my party leader has said. He has his own reasons for saying it. My concern is much more that our relationship with the US, as a strategic and economic partnership, is important for us.' The Congress leader said India must protect its strong trade ties with the US, emphasising that America is one of the country's biggest export markets, with around $90 billion worth of goods going there annually. 'We are exporting something like 90 billion worth of goods to America. We can't therefore be in a position where we are going to lose that or have it diminish significantly. Some people say Oh, that is only 2 per cent of our GDP, but in terms of percentage of our exports, America is one of our largest markets,' he claimed. On the issue of tariffs, Shashi Tharoor backed India's trade negotiators, saying, 'When we look at the tariff question, we must wish our negotiators strength and courage in working out a fair deal for India.' 'We should also be talking to other regions for exporting our goods. Then we could make up for some of what we might lose in the US. We have to support our negotiators,' Tharoor added. Donald Trump recently stirred controversy by calling India's economy 'dead' while announcing new 25 per cent tariffs on Indian goods. In a post on Truth Social, Trump said, 'India and Russia can take their dead economies down together, for all I care.' The remarks were seen as a sharp escalation in trade tensions and drew mixed responses from Indian politicians. Congress leader and Lok Sabha MP Rahul Gandhi appeared to agree with Trump's view, saying India's economy was indeed in poor shape. 'I don't care what Trump said. The reality is that India's economy is dead. And it has been murdered by the BJP government,' he told reporters.
