US: Stocks end lower after strong start as rally fades
Facebook parent Meta surged 11.3 per cent and Microsoft jumped 4.0 per cent after both companies reported strong quarterly results that underscored their strength in artificial intelligence. Microsoft's valuation topped US$4 trillion for part of the day before retreating.
But major indices were unable to hold on to early gains, with the Dow Jones Industrial Average finishing down 0.7 per cent at 44,130.98.
The broad-based S&P 500 declined 0.4 per cent to 6,339.39, while the tech-rich Nasdaq Composite Index slipped less than 0.1 per cent to 21,122.49.
Some of the caution was due to a squaring of trading positions ahead of Friday's jobs data, which could lead to market volatility, said Steve Sosnick of Interactive Brokers, adding that Amazon and Apple earnings later on Thursday could also spur heavy trading.
Markets are also looking ahead to President Donald Trump's Aug 1 deadline, with Canada among the countries that has yet to reach an accord with the United States.
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Trump said on Thursday he would hold off a planned tariff hike on Mexican products and instead keep duties at existing levels for 90 days after speaking with his counterpart Claudia Sheinbaum.
After initially greeting trade deals, investors are also reevaluating Trump's trade agreements, most recently with South Korea, the latest to set a 15 per cent tariff on goods.
'I think the market has kind of come to grips with the idea that 15 per cent is the new standard but maybe there's a little bit of a realisation that 15 per cent tariffs are not actually all that market-friendly,' Sosnick said.
Health was the weakest sector in the S&P 500, with pharmaceutical companies selling off after Trump threatened using 'every tool in our arsenal' if the sector doesn't lower prices. Pfizer, Merck and Bristol-Myers Squibb all dropped more than two per cent.
Shares of online design platform Figma more than tripled to US$115.50 in its first day of trading on the New York Stock Exchange after its initial public offering was priced at US$33. AFP
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Straits Times
2 hours ago
- Straits Times
US, NATO developing novel funding mechanism for Ukraine weapons transfers
FILE PHOTO: Ukrainian service members walk next to a launcher of a Patriot air defence system, amid Russia's attack on Ukraine, in an undisclosed location, Ukraine August 4, 2024. REUTERS/Valentyn Ogirenko/File Photo WASHINGTON - The United States and NATO are working on a novel approach to supply Ukraine with weapons using funds from NATO countries to pay for the purchase or transfer of U.S. arms, according to three sources familiar with the matter. The renewed transatlantic cooperation on Ukraine comes as U.S. President Donald Trump has expressed frustration with Moscow's ongoing attacks on its neighbor. Trump, who initially took a more conciliatory tone toward Russia as he tried to end the more than three-year war in Ukraine, has threatened to start imposing tariffs and other measures if Moscow shows no progress toward ending the conflict by August 8. The president said last month the U.S. would supply weapons to Ukraine, paid for by European allies, but did not indicate how this would be done. NATO countries, Ukraine, and the United States are developing a new mechanism that will focus on getting U.S. weapons to Ukraine from the Priority Ukraine Requirements List, known under the acronym PURL, the sources said. Ukraine would prioritize the weapons it needs in tranches of roughly $500 million, and NATO allies - coordinated by NATO Secretary General Mark Rutte - would then negotiate among themselves who would donate or pay for items on the list. Through this approach, NATO allies hope to provide $10 billion in arms for Ukraine, said a European official, speaking on condition of anonymity. It was unclear over what timeframe they hope to supply the arms. "That is the starting point, and it's an ambitious target that we're working towards. We're currently on that trajectory. We support the ambition. We need that sort of volume," the European official said. Top stories Swipe. Select. Stay informed. Tech Reporting suspected advanced cyber attacks will provide a defence framework: Shanmugam Business Singapore's US tariff rate stays at 10%, but the Republic is not out of the woods yet Asia Asia-Pacific economies welcome new US tariff rates, but concerns over extent of full impact remain Business ST explains: How Trump tariffs could affect Singapore SMEs, jobs and markets Asia Indonesia's Mount Lewotobi Laki-laki erupts Singapore Thundery showers expected on most days in first half of August Singapore Synapxe chief executive, MND deputy secretary to become new perm secs on Sept 1 Singapore 5 women face capital charges after they were allegedly found with nearly 27kg of cocaine in S'pore NATO declined to comment. The White House, Pentagon, and Ukrainian embassy in Washington did not respond to requests for comment. Russian forces are gradually advancing against Ukraine, and control one-fifth of Ukraine's territory. FASTER ARMS RESTOCKING If a NATO country decides to donate weapons to Ukraine, the mechanism would allow that country to effectively bypass lengthy U.S. arms sales procedures to replenish its own stocks, said one U.S. official, speaking on condition of anonymity. But the NATO country would have to pay the U.S. up front for the speedier replenishment. The money would be paid into a U.S.-held account, possibly at the U.S. Treasury Department, or to an escrow fund, although the exact structure remains unclear, the official said. NATO countries also have the option of simply paying the United States to send weapons directly to Ukraine. In that case, the payment could be made via NATO or directly to the U.S. Department of Defense, said a second source, speaking on condition of anonymity. This would be in addition to the United States' own effort to identify arms from U.S. stockpiles to send to Ukraine under the Presidential Drawdown Authority, which allows the U.S. president to draw from current weapons stocks to help allies in an emergency. At least one tranche of weapons for Ukraine is currently being negotiated under the new mechanism, two sources said, though it was unclear if any money has yet been transferred. Trump's fellow Republicans in Congress have introduced legislation, known as the PEACE Act, that aims to create a fund at the U.S. Treasury in which allies can deposit money that would pay to replenish U.S. military equipment donated to Ukraine. Ukraine's needs remain consistent with previous months - air defenses, interceptors, systems, rockets, and artillery. The last statement of need from Ukraine came at the July 21 Ramstein conference led by EU allies, including Britain. REUTERS
Straits Times
2 hours ago
- Straits Times
UOB to trim deposit rates on flagship account from Sept 1 after OCBC cut; DBS stays unchanged
Sign up now: Get ST's newsletters delivered to your inbox A flagship savings account is a bank's best savings product, which offers bonus interest rates that go up as customers transact more with the bank. SINGAPORE – Interest rates keep falling for savings accounts here with UOB now about to fire the next salvo. The lender said it is cutting rates for its flagship UOB One account from Sept 1 – the third such reduction in the past two years. UOB's move follows on the heels of OCBC, which dropped rates on its 360 account from Aug 1 – the second time this year. DBS remains the last one standing, with rates on the Multiplier account remaining unchanged at between 1.8 per cent and 4.1 per cent. A flagship account is a bank's best savings product, offering bonus interest rates that rise as customers make more transactions, such as credit their salary, spend on their credit card, take up a loan or buy an insurance policy. UOB told customers that it is dropping the bonus rates for two categories by between 0.5 and 0.8 percentage point. The affected categories are: Card spend and the requirement to make three debit transactions via Giro; and card spend and salary credit. UOB One customers will earn between 1 per cent and 3 per cent on their first $125,000 from Sept 1, if they fulfil the criteria for the two categories. The rates are down from between 1.5 per cent and 3.8 per cent. Top stories Swipe. Select. Stay informed. 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If they credit their salary and spend on their UOB credit card, they can expect between $1,125 and $2,625 a year and between $487.50 and $512.50 if they only use their credit card. The upcoming revision is the third time the bank has trimmed rates for the UOB One account since May 2024. A UOB spokesperson said the revisions align with the longer-term interest rate outlook. The announcement follows the July 30 decision from the US Federal Reserve to keep rates steady there at 4.25 per cent to 4.5 per cent . The spokesperson added that the number of customers who earned bonus interest on their UOB One account has increased by more than 10 per cent year on year as at June 30. Mr Michael Makdad, senior equity analyst at investment research firm Morningstar, said UOB had been the more aggressive in offering higher rates among the three local banks in order to attract deposits. He added that he is not surprised that it is cutting rates again as it seeks to 'normalise its offerings that may have been more attractive than (its) peers for some customers'. Mr Glenn Thum, research manager at Phillip Securities Research, said that UOB may be trying to sustain its net interest margin (NIM) by lowering its funding costs. NIM is the difference between the interest income a bank receives from lending and what interest it pays on customer deposits. A higher NIM means more profit, a lower one indicates it is earning less from its lending and deposit activities. Meanwhile, OCBC 360 customers are now earning lower rates after the bank trimmed the interest it pays on certain bonus categories, such as salary credit, savings and card spend, from Aug 1. The bonus rates for the insurance and investment tiers remain unchanged. This marks the second time OCBC has dropped deposit rates on its 360 account, the first coming on May 1, 2025 . Morningstar's Mr Makdad said OCBC has the buffer to follow up with another cut after its results on Aug 1 showed that deposits in current and savings accounts increased 14 per cent year on year to $203 billion as at June 30. Such deposits are seen as cheaper sources of funding for banks. However, Phillip Securities' Mr Thum does not think OCBC will lower rates on the 360 account in the next few months unless the US Fed cuts rates faster than expected. An OCBC spokesperson said its 360 account remains a competitive product. The spokesperson added that the bank 'regularly reviews its product offerings and interest rates to align them with the competitive landscape and market conditions'. Ms Helen Tran, DBS' head of consumer deposits and transactional payments, said the bank has maintained its rates, an approach that has yielded positive outcomes. The number of DBS Multiplier customers increased by more than 30 per cent from March 2022 to March 2025, she noted, adding that 'growth momentum remains strong'. Ms Tran said that the DBS Multiplier remains the only savings account that recognises retirement payouts from the Central Provident Fund account as part of income in the 'Bank & Earn' space. The initiative means that 900,000 Singaporean or permanent resident customers aged 65 and above automatically qualify for higher interest rates on their Multiplier balances. The flurry of deposit rate cuts has left some depositors, like 57-year old civil engineer Leong Meng Sun, scurrying for another bank. Mr Leong was with Standard Chartered initially but switched after the interest on his account dropped from $20 a month in December 2024 to less than $9 from January 2025, for the same salary. He looked at the OCBC 360 but felt he would struggle to meet the requirement to increase his monthly account balances by $500. He then settled on the DBS Multiplier because it pays 1.8 per cent for smaller account balances of $50,000 like his, given he can meet the salary credit and credit card spend criteria. He also likes that Multiplier customers can continue to earn interest after they retire, but acknowledges that DBS may also follow UOB and OCBC to cut the deposit rates: 'It is a risk I have to take.'
International Business Times
2 hours ago
- International Business Times
Appeals Court Questions Trump's Use of Emergency Powers to Justify Tariffs
A US federal appeals court raised serious doubts about President Donald Trump's authority to impose broad tariffs under emergency powers. During a hearing in Washington, D.C., judges questioned whether the International Emergency Economic Powers Act (IEEPA) grants the president the legal right to impose tariffs on allied nations like Canada, China, and Mexico. Trump had used IEEPA to introduce what he called "reciprocal" tariffs in April and further increased them in February. The case now before the U.S. Court of Appeals for the Federal Circuit was brought by five small businesses and 12 Democratic-led states. They argue that Trump overstepped his powers and that only Congress has the constitutional right to set tariffs and taxes. Government lawyer Brett Shumate defended Trump's move, saying IEEPA gives the president broad authority in economic emergencies, including regulating imports. But Judge Jimmie Reyna responded, "IEEPA doesn't even mention tariffs." Several judges appeared skeptical throughout the 90-minute hearing, which concluded without a ruling date. The outcome of this case could have major implications. Trump, who made tariffs a key trade tool during his second term, claims they helped address unfair trade practices and boosted U.S. manufacturing. He cited the U.S. trade deficit and illegal fentanyl imports as justification. However, critics argue these reasons do not constitute an "extraordinary threat" under the law. Earlier this year, a lower court also ruled that IEEPA does not support tariffs based on long-term trade imbalances. The appeals court has allowed the tariffs to stay in place while legal challenges continue. With customs duties now generating over $100 billion in revenue this fiscal year, tariffs have become a significant funding source. Still, economists warn that they raise consumer prices and disrupt supply chains. The Trump administration argues that removing tariff power could harm trade negotiations, although recent deals with the EU, Japan, and others have moved forward. Trump has warned of further tariff hikes on countries not reaching new trade deals by August 1. The final decision in this case is likely to head to the U.S. Supreme Court if either side loses.
