Rally fizzles on Wall Street as tariff clock ticks and US economy falters
US President Donald Trump told CNBC he plans fresh tariffs on imported pharmaceuticals and semiconductors. Trump also said he expects to raise the US tariff on Indian imports due to the country's purchases of Russian oil.
The statements come before a separate set of tariff hikes goes into force on dozens of economies later this week. Swiss officials travelled to Washington yesterday to try to strike a last-minute deal.
Investors also digested an index of US services activity that came in at 50.1 per cent, just barely in growth mode as companies contend with weaker hiring conditions and increased pricing pressure.
The report comes on the heels of jobs data last Friday that pointed to slowing in the labour market.
On the positive side, 'a weaker economy could mean more rate cuts from the Fed,' said Adam Sarhan of 50 Park Investments.
After opening higher, US indices fell into negative territory, with the S&P 500 ending down 0.5 per cent.
European markets ended mixed, with Paris dipping into the red, while oil prices retreated further on worries about the demand outlook.
Swiss leaders flew to Washington yesterday in a last-ditch effort to avoid a hefty 39-per cent tariff.
Meanwhile, the European Union yesterday announced the suspension of its retaliatory tariffs on US goods worth €93 billion (RM454.8 billion) after Brussels struck a deal with Washington last month.
Among individual companies, Palantir Technologies jumped 7.9 per cent after reporting its first quarter with more than US$1 billion in revenues. The data analysis and artificial intelligence company also raised its full-year revenues forecast.
Pfizer was another big winner after earnings as the drugmaker reported a big increase in profits to US$2.9 billion behind higher sales of Covid-19 products and lower expenses. Shares jumped 5.2 per cent.
Diageo, the maker of Guinness stout and Smirnoff Vodka, rose 4.9 per cent after raising its cost-savings targets following a sharp drop in profits to the hit from US tariffs. — AFP
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