Wall Street rises as stock markets worldwide take Trump's new tariffs in stride
NEW YORK — Stocks are rising on Wall Street Thursday, even as U.S. President Donald Trump's latest tariffs kicked into effect on dozens of countries.
The S&P 500 was 0.5 per cent higher in early trading and sitting just a bit below its record, which was set late last month. The Dow Jones Industrial Average was up 254 points, as of 9:31 a.m. Eastern time, and the Nasdaq composite was 0.8 per cent higher.
Worries are still high that Trump's tariffs are damaging the economy, particularly after last week's worse-than-expected report on the job market. But hopes for coming cuts to interest rates by the U.S. Federal Reserve and a torrent of stronger-than-expected profit reports have been overshadowing the concerns on Wall Street, at least for now.
Lower interest rates can give the economy and investment prices a boost, though the downside is that they can also push inflation higher.
The Bank of England cut its main interest rate on Thursday in hopes of bolstering the sluggish U.K. economy.
The U.S. tariffs that took effect Thursday morning were also already well known, as well as lower than what Trump had initially threatened. Some countries are still trying to negotiate down the tax rates on their exports, and continued uncertainty seems to be the only certainty on Wall Street.
All the while, the U.S. stock market faces criticism that it's climbed too far, too fast since hitting a bottom in April and left prices looking too expensive.
The latest reports on the U.S. economy came in mixed, meanwhile, which left U.S. Treasury yields relatively stable in the bond market.
One said that slightly more U.S. workers applied for unemployment benefits last week, which could be an indication of rising layoffs. But the number remains within its recent range.
'There is nothing to see here!' according to Carl Weinberg, chief economist at High Frequency Economics. 'These are not nearly recession readings.'
A separate report said that productivity for U.S. workers improved by more during the spring than economists expected. That could help the U.S. economy grow without adding more pressure on inflation, which is particularly important when Trump's tariffs look set to increase prices for all kinds of things that U.S. households and businesses buy.
On Wall Street, Apple again helped lead the market amid hopes that its massive size can help it navigate the new economy Trump is trying to fashion. Its stock rose 1.8 per cent after its CEO, Tim Cook, joined Trump at the White House on Wednesday to say it's increasing its investment in U.S. manufacturing by an additional US$100 billion over the next four years.
DoorDash climbed 7.3 per cent after the food delivery app topped Wall Street's profit expectations for the latest quarter. It attracted new customers and saw the total number of orders increase.
Duolingo, the language-learning app, soared 31.3 per cent after it crushed Wall Street's expectations. The company said its subscription revenue grew 46 per cent over the same period last year.
They helped offset a drop for Eli Lilly, which fell 11 per cent even though the drugmaker reported a stronger profit than analysts expected. Analysts said some investors were disappointed with results that Lilly provided for a late-stage study of orforglipron, its potential pill version of the popular weight-loss drug Zepbound.
Intel slipped 1.2 per cent after Trump called for its CEO to resign, while accusing him of being 'highly CONFLICTED,' though he gave no evidence.
In stock markets abroad, indexes rose across much of Europe and Asia.
Stocks rose 0.2 per cent in Shanghai and 0.7 per cent in Hong Kong after China reported that its exports picked up in July, helped by a flurry of shipments by businesses taking advantage of a pause in Trump's tariff war with Beijing.
Japan's Nikkei 225 rose 0.6 per cent. Toyota Motor's stock fell after it cut its full-year earnings forecasts largely because of President Donald Trump's tariffs, but Sony rose after the entertainment and electronics company indiciated it's taking less damage from the tariffs than it had expected.
In the bond market, the yield on the 10-year Treasury remained at 4.22 per cent, where it was late Wednesday.
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AP business writers Teresa Cerojano and Matt Ott contributed.
By Stan Choe
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