S&P, Nasdaq again close at record highs, trade choppy
NEW YORK: The S&P 500 edged higher to eke out a record high close for a sixth straight session on Monday, while the Nasdaq also advanced to a closing record in choppy trade as investors gauged the U.S.-EU trade pact and prepared for a week of major market catalysts.
U.S. President Donald Trump and European Commission President Ursula von der Leyen unveiled a trade framework on Sunday, slashing EU import tariffs to 15% - half the previously threatened rate that was scheduled to take effect on August 1. Still, France denounced the deal as a "submission."
The deal is the latest announcement in recent days on U.S. trade agreements with countries such as Japan and Indonesia. Top U.S. and Chinese economic officials resumed talks in Stockholm to resolve a trade war between the world's two largest economies.
"It's feel-good in the sense that it doesn't represent Armageddon, if the draconian tariffs went into place," said Scott Welch, chief investment officer at Certuity in Potomac, Maryland.
"But it's much too soon to pass judgment on the long-term effects on how that will play out. It's better than the alternative for sure, and so I hope they continue."
The Dow Jones Industrial Average fell 64.36 points, or 0.14%, to 44,837.56, the S&P 500 gained 1.13 points, or 0.02%, to 6,389.77 and the Nasdaq Composite gained 70.27 points, or 0.33%, to 21,178.58.
The benchmark S&P 500 index has now notched six straight daily closing records, en route to its 15th closing record of the year. Stocks have rebounded strongly from a selloff that began in early April when Trump announced a slew of tariffs.
Mounting enthusiasm over the potential for AI technology has helped lift stocks, along with the realization of some trade pacts and early indications corporate earnings season may be better than anticipated.
Investors now await a policy announcement from the Federal Reserve on Wednesday. The central bank is widely expected to keep U.S. rates unchanged even as Trump has ramped up pressure on Fed Chair Jerome Powell to lower borrowing costs.
Also on deck this week were a slew of corporate earnings, including results from heavyweights Meta, Microsoft, Amazon and Apple, which could sway broader investor sentiment in either direction.
Along with the Fed meeting and earnings, a number of economic indicators are scheduled to be released this week, including the Personal Consumption Expenditure report (PCE) - the Fed's preferred inflation measure - and the government payrolls report to gauge how tariffs may have affected consumer prices and the labor market.
Nike climbed 3.89% after J.P. Morgan upgraded the stock to "overweight" from "neutral" and said investors should "just buy it".
Energy, up 1.15% was the best performing S&P sector on the session, buoyed by a jump of more than 2% in oil prices while real estate, down 1.75%, and materials , off 1.44%, were the worst performing.
Declining issues outnumbered advancers by a 1.81-to-1 ratio on the NYSE, and by a 1.48-to-1 ratio on the Nasdaq.
The S&P 500 posted 26 new 52-week highs and five new lows, while the Nasdaq Composite recorded 68 new highs and 54 new lows.
Volume on U.S. exchanges was 17.58 billion shares, compared with the 17.84 billion average for the full session over the last 20 trading days. - Reuters
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The Star
2 hours ago
- The Star
From Laos to Brazil, Trump's tariffs leave a lot of losers. But even the winners like Vietnam will pay a price
WASHINGTON (AP): President Donald Trump's tariff onslaught this week left a lot of losers - from small, poor countries like Laos and Algeria to wealthy US trading partners like Canada and Switzerland. They're now facing especially hefty taxes - tariffs - on the products they export to the United States starting Aug. 7. The closest thing to winners may be the countries that caved to Trump's demands - and avoided even more pain. But it's unclear whether anyone will be able to claim victory in the long run - even the United States, the intended beneficiary of Trump's protectionist policies. "In many respects, everybody's a loser here,'' said Barry Appleton, co-director of the Center for International Law at the New York Law School. Barely six months after he returned to the White House, Trump has demolished the old global economic order. Gone is one built on agreed-upon rules. In its place is a system in which Trump himself sets the rules, using America's enormous economic power to punish countries that won't agree to one-sided trade deals and extracting huge concessions from the ones that do. "The biggest winner is Trump,' said Alan Wolff, a former U.S. trade official and deputy director-general at the World Trade Organization. "He bet that he could get other countries to the table on the basis of threats, and he succeeded - dramatically.'' Everything goes back to what Trump calls "Liberation Day'' - April 2 - when the president announced "reciprocal'' taxes of up to 50% on imports from countries with which the United States ran trade deficits and 10% "baseline'' taxes on almost everyone else. He invoked a 1977 law to declare the trade deficit a national emergency that justified his sweeping import taxes. That allowed him to bypass Congress, which traditionally has had authority over taxes, including tariffs - all of which is now being challenged in court. Trump retreated temporarily after his Liberation Day announcement triggered a rout in financial markets and suspended the reciprocal tariffs for 90 days to give countries a chance to negotiate. Eventually, some of them did, caving to Trump's demands to pay what four months ago would have seemed unthinkably high tariffs for the privilege of continuing to sell into the vast American market. The United Kingdom agreed to 10% tariffs on its exports to the United States - up from 1.3% before Trump amped up his trade war with the world. The US demanded concessions even though it had run a trade surplus, not a deficit, with the UK for 19 straight years. The European Union and Japan accepted U.S. tariffs of 15%. Those are much higher than the low single-digit rates they paid last year - but lower than the tariffs he was threatening (30% on the EU and 25% on Japan). Also cutting deals with Trump and agreeing to hefty tariffs were Pakistan, South Korea, Vietnam, Indonesia and the Philippines. Even countries that saw their tariffs lowered from April without reaching a deal are still paying much higher tariffs than before Trump took office. Angola's tariff, for instance, dropped to 15% from 32% in April, but in 2022 it was less than 1.5%. And while Trump administration cut Taiwan's tariff to 20% from 32% in April, the pain will still be felt. "20% from the beginning has not been our goal, we hope that in further negotiations we will get a more beneficial and more reasonable tax rate,' Taiwan's president Lai Ching-te told reporters in Taipei Friday. Trump also agreed to reduce the tariff on the tiny southern African kingdom of Lesotho to 15% from the 50% he'd announced in April, but the damage may already have been done there. Countries that didn't knuckle under - and those that found other ways to incur Trump's wrath - got hit harder. Even some of the poor were not spared. Laos' annual economic output comes to $2,100 per person and Algeria's $5,600 - versus America's $75,000. Nonetheless, Laos got rocked with a 40% tariff and Algeria with a 30% levy. Trump slammed Brazil with a 50% import tax largely because he didn't like the way it was treating former Brazilian President Jair Bolsonaro, who is facing trial for trying to lose his electoral defeat in 2022. Never mind that the U.S. has exported more to Brazil than it's imported every year since 2007. Trump's decision to plaster a 35% tariff on longstanding U.S. ally Canada was partly designed to threaten Ottawa for saying it would recognize a Palestinian state. Trump is a staunch supporter of Israeli Prime Minister Benjamin Netanyahu. Switzerland was clobbered with a 39% import tax - even higher than the 31% Trump originally announced on April 2. "The Swiss probably wish that they had camped in Washington'' to make a deal, said Wolff, now senior fellow at the Peterson Institute for International Economics. "They're clearly not at all happy.'' Fortunes may change if Trump's tariffs are upended in court. Five American businesses and 12 states are suing the president, arguing that his Liberation Day tariffs exceeded his authority under the 1977 law. In May, the U.S. Court of International Trade , a specialized court in New York, agreed and blocked the tariffs, although the government was allowed to continue collecting them while its appeal wend its way through the legal system, and may likely end up at the U.S. Supreme Court. In a hearing Thursday, the judges on the U.S. Court of Appeals for the Federal Circuit sounded skeptical about Trump's justifications for the tariffs. "If (the tariffs) get struck down, then maybe Brazil's a winner and not a loser,'' Appleton said. Trump portrays his tariffs as a tax on foreign countries. But they are actually paid by import companies in the U.S. who try to pass along the cost to their customers via higher prices. True, tariffs can hurt other countries by forcing their exporters to cut prices and sacrifice profits - or risk losing market share in the United States. But economists at Goldman Sachs estimate that overseas exporters have absorbed just one-fifth of the rising costs from tariffs, while Americans and U.S. businesses have picked up the most of the tab. Walmart, Procter & Gamble, Ford, Best Buy, Adidas, Nike, Mattel and Stanley Black & Decker, have all hiked prices due to U.S. tariffs. "This is a consumption tax, so it disproportionately affects those who have lower incomes,'' Appleton said. "Sneakers, knapsacks ... your appliances are going to go up. Your TV and electronics are going to go up. Your video game devices, consoles are going to up because none of those are made in America.'' Trump's trade war has pushed the average U.S. tariff from 2.5% at the start of 2025 to 18.3% now, the highest since 1934, according to the Budget Lab at Yale University. And that will impose a $2,400 cost on the average household, the lab estimates. "The US consumer's a big loser,″ Wolff said. -- AP Economics Writer Christopher Rugaber contributed to this story.
The Star
4 hours ago
- The Star
‘Every day, we think about how to upgrade': China's factories see rise in robot adoption
GUANGZHOU (The Straits Times/ANN): When Sun Huihai first began working at a factory in the southern manufacturing belt of Guangdong some 13 years ago, his colleagues were all humans. Now, they are joined by more than 200 robots which can work around the clock, seven days a week, to help produce air-conditioners for home appliances giant Midea. Rows of bright orange robot arms whir at all hours of the day, fishing freshly pressed plastic parts out of hot metal moulds and onto a long conveyor belt. Driverless robots with blinking lights store these parts in a multi-storey warehouse, and later take them to be assembled into units that are sold in China and around the world. The number of robots put to work on the factory floor increases every year, said Mr Sun, 37, who heads the plant's engineering department. 'Every day, we think about how to upgrade and make manufacturing here more intelligent,' he told The Straits Times. Scenes like this have become more common across China, as the 'factory of the world' turns to robotics to sustain and turbocharge its manufacturing juggernaut. Over the past decade, the number of industrial robots on China's factory floors has increased more than six times to over 1.7 million, as companies grappled with rising wages and a shortage of workers willing to staff production lines. China now has the world's third-highest density of robots in its manufacturing industry, trailing South Korea and Singapore in first and second place respectively, according to the International Federation of Robotics' figures for 2023, the latest available. Their deployment is poised to increase further as China continues its transition from low-value, labour-intensive production to advanced manufacturing – a national priority. 'At any given time, China cannot do without the manufacturing industry,' said Chinese President Xi Jinping in 2023. 'The state will strongly support the development of high-end manufacturing,' he added. Policymakers in China, wary of the hollowing out of industries which can occur when countries get richer, have long pushed for greater automation to keep factories competitive. A decade ago, the government rolled out 'Made in China 2025', a plan to upgrade manufacturing and become a production hub for high-tech sectors such as robots. Rebates, subsidies and other incentives have been offered to encourage factories to automate. A rise in domestic production of industrial robots has also reduced prices, making the machines more affordable. Factories in China pumped out nearly 370,000 of such robots in the first half of 2025, up 35.6 per cent from the previous year, according to figures from the National Bureau of Statistics. At the Midea factory in Nansha, Guangzhou, where Mr Sun works, there are 204 robotic arms and 82 automated guided vehicles. They are supplied by Kuka, a German industrial robot giant which the Chinese company bought over. One section of the plant, where plastic parts for the air-conditioner are moulded and retrieved, is dubbed a 'dark (heideng)' area. It is so named because of the high degree of automation: In theory, it can run without humans or any lights on, but in practice, it is brightly lit here at the plant. Not every part of the factory is as automated, a costly endeavour. Humans are needed to staff assembly lines, maintain the machines, and check the quality of manufactured parts. The facility employs some 4,000 workers during peak season, Mr Sun says. Elsewhere, other manufacturers of electrical items, electronics and cars – the main users of industrial robots in China – have also ramped up the use of technology on their factory floors. 'Dark factories' have become a buzzword to describe the most advanced of China's production facilities. Such operations have reportedly been adopted by companies ranging from home appliance giants Xiaomi and Gree to automakers Changan and Zeekr. As robot adoption picks up pace, one question that arises is: What will happen to the more than 100 million workers whom China's manufacturing sector employs? The automation drive has at times been dubbed 'replace humans with robots (jiqi huanren)'. In 2021, Gree's chairman said that the company's 'dark factory' had slashed the need for workers at the plant from 10,000 to 1,000. In Mr Sun's telling, employment at Midea's air-conditioner factory has remained roughly unchanged from a decade ago. What has changed, he said, is productivity. The number of air-conditioners the factory produces has more than tripled from 2015, company figures show. Academics Nicole Wu and Sun Zhongwei, who interviewed and surveyed factory workers in southern China just prior to the Covid-19 pandemic, found that these individuals were not too concerned about robots just yet. 'Contrary to the more pessimistic assessments of automation, most manufacturing workers in Guangdong – who are buffered by steady increases in demand and a chronic labour shortage – appear to be unfazed by technological change at present,' they wrote in a paper published this year. As China's birth rate falls and the population grows more educated, it has become more difficult for factory bosses to fill jobs, said Professor Sun Zhongwei, who studies industrial relations and social security at the South China Normal University. He is not worried that the automation drive will go so far as to undermine the manufacturing jobs often seen as a means of stabilising employment, because market forces are at play. Automation is a rational process, and industrial robots are a sizeable investment, Prof Sun said. 'Companies will need to calculate whether the cost of the machinery justifies the wages saved.' Still, he added, the biggest losers as manufacturing goes high-tech are lower educated, older migrant workers who lack the skills to remain relevant. Many will have to return to their rural homes to do odd jobs, while others might find employment as service staff. Back at the Midea factory, Mr Wang Liangcai, 26, an engineer, believes that his job is safe from automation for now. 'Equipment still needs to be maintained, it can't do so itself,' he said. 'But if you think about the long run... we also don't know how things will be.' - The Straits Times/ANN
The Star
4 hours ago
- The Star
China EV war: Tesla, Nio, and Li Auto target mainland families with premium SUVs
Electric-vehicle (EV) makers from Tesla to Nio are shifting their focus from price cuts to developing spacious family friendly, long-range vehicles for the mainland Chinese market. The premium SUV segment has emerged as the new battlefront, as carmakers heed Beijing's call to end a brutal price war and chase affluent consumers to improve their bottom line.
