Wall Street rises after strong US GDP data
In early trading on Wednesday, the Dow Jones Industrial Average rose 1.42 points to 44,632.50, the S&P 500 gained 7.20 points, or 0.11 per cent, to 6,378.06 and the Nasdaq Composite gained 47.19 points, or 0.22 per cent, to 21,145.48.
US economic growth rebounded in the second quarter, beating expectations, but the reality remains grim as most of the boost came from waning imports while domestic demand only inched higher.
"The market's taking some reassurance from the headline number but the more you dig into it, the more concerned that you get," said Ben Laidler, head of equity strategy at Bradesco BBI.
"It puts the Fed in a tougher position, with the rise coming in higher than expected. There's a huge amount of tariff noise in this reading.
Following the data, traders dialled back their bets on a September Fed rate cut with the odds slipping to 57 per cent from 64 per cent, according to CME's FedWatch tool.
While analysts anticipate little drama from the Fed decision, investors will be parsing chair Jerome Powell's comments for any hints on future policy direction especially as the central bank navigates political pressure and assesses the effects of tariffs on inflation.
The latest ADP report showed private payrolls grew by 104,000 in July, topping forecasts of 75,000, ahead of Friday's all-important non-farm payrolls release.
Investors are now placing their bets on results from megacaps to steer Wall Street to new highs.
Microsoft and Meta Platforms will report their results after the market closes while Amazon and Apple will report on Thursday.
A burst of upbeat earnings from consumer favourites underscored the resilience of US shoppers.
Starbucks posted better-than-expected third-quarter sales but its shares slipped 1.3 per cent.
Hershey gained 4.0 per cent on results that topped forecasts.
VF Corp, parent of Vans, jumped 22 per cent while Kraft Heinz was largely steady after both companies beat quarterly revenue estimates, adding to the consumer-driven rally.
Still, caution crept into markets after US President Donald Trump slapped a 25 per cent tariff on Indian imports starting on August 1, vowing no deadline extensions for trading partners without a deal in place.
Meanwhile, US-China trade talks wrapped up with both sides seeking to extend their tariff truce, leaving the final call in Trump's hands.
South Korea was also lobbying to secure a trade deal ahead of Trump's August 1 deadline as its officials met US Commerce Secretary Howard Lutnick in Washington DC.
Among other earnings moves, Humana gained 10 per cent after the health insurer raised its annual profit forecast.
Global payments processing company Visa fell 2.3 per cent despite beating estimates for third-quarter earnings as it kept its annual net revenue growth forecast unchanged.
Declining issues outnumbered advancers by a 1.18-to-1 ratio on the NYSE, while advancing issues outnumbered decliners by a 1.22-to-1 ratio on the Nasdaq.
The S&P 500 posted 14 new 52-week highs and four new lows while the Nasdaq Composite recorded 25 new highs and 39 new lows.
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Southeast Asian countries largely breathed a sigh of relief after the US tariffs on their exports that were lower than threatened and leveled the playing field with a rate of about 19 per cent across the region's biggest economies. Thailand's finance minister said a reduction from 36 per cent to 19 per cent would help his country's economy. While India is in talks after being slapped with a 25 per cent tariff, which could impact about $US40 billion ($A62 billion) worth of its exports. Trump issued a separate order for Canada that raises the rate on Canadian goods subject to fentanyl-related tariffs to 35 per cent, from 25 per cent previously, saying Canada had "failed to cooperate" in curbing illicit narcotics flows into the US. This is contrast to his decision to allow Mexico a 90-day reprieve from higher tariffs to allow time to negotiate. Businesses and analysts said the impact of Trump's new trade regime would not be positive for economic growth. "No real winners in trade conflicts," said Thomas Rupf, co-head Singapore and CIO Asia at VP Bank. "Despite some countries securing better terms, the overall impact is negative." US President Donald Trump's latest wave of tariffs on exports from dozens of trading partners sent global stock markets tumbling and countries and companies scrambling to seek ways to strike better deals. As Trump presses ahead with plans to reorder the global economy with the highest tariff rates since the early 1930s, Switzerland, "stunned" by 39 per cent tariffs, sought more talks, as did India, hit with a 25 per cent rate. New tariffs announced on Friday also included a 35 per cent duty on many goods from Canada, 50 per cent for Brazil, 20 per cent for Taiwan, which said its rate was "temporary" and it expected to reach a lower figure. The presidential order listed higher import duty rates of 10 per cent to 41 per cent starting in a week's time for 69 trading partners, taking the US effective tariff rate to about 18 per cent, from 2.3 per cent last year, according to analysts at Capital Economics. US stocks took a hit. By afternoon on Friday, the Dow Jones Industrial Average had dropped 1.46 per cent to 43,486.45, the S&P 500 1.8 per cent to 6,225.55 and the Nasdaq Composite 2.42 per cent to 20,610.91. Markets were also reacting to a disappointing jobs report. Data showed US job growth slowed more than expected in July while the prior month's data was revised sharply lower, pointing to a slowdown in the labour market. Global shares stumbled, with Europe's STOXX 600 tumbling 1.89 per cent on the day. Trump's new tariffs have created yet more uncertainty, with many details unclear. They are set to take effect on August 7, a White House official said. Trump administration officials defended the president's approach saying the uncertainty was "critical" for him to be able to leverage a better deal. "The trade deals we've seen over the last few weeks... have been nothing short of monumental," Council of Economic Advisers Chair Stephen Miran said on CNBC. Trump's tariff rollout also comes amid evidence they have begun driving up prices of home furnishings and household equipment. Australian products could become more competitive in the US market, helping businesses boost exports, Trade Minister Don Farrell said, after Trump kept the minimum tariff rate of 10 per cent for Australia. The European Union, which struck a framework deal with Trump on Sunday, is still awaiting more Trump orders to deliver on agreed carve-outs, including on cars and aircraft, EU officials said, saying the latest executive orders did not cover that. Switzerland said it would push for a "negotiated solution" with the US, with industry insiders saying they were "stunned" by the 39 per cent tariffs. South Africa's Trade Minister Parks Tau said he was seeking "real, practical interventions" to defend jobs and the economy against the 30 per cent US tariff it faces. Southeast Asian countries largely breathed a sigh of relief after the US tariffs on their exports that were lower than threatened and leveled the playing field with a rate of about 19 per cent across the region's biggest economies. Thailand's finance minister said a reduction from 36 per cent to 19 per cent would help his country's economy. While India is in talks after being slapped with a 25 per cent tariff, which could impact about $US40 billion ($A62 billion) worth of its exports. Trump issued a separate order for Canada that raises the rate on Canadian goods subject to fentanyl-related tariffs to 35 per cent, from 25 per cent previously, saying Canada had "failed to cooperate" in curbing illicit narcotics flows into the US. This is contrast to his decision to allow Mexico a 90-day reprieve from higher tariffs to allow time to negotiate. Businesses and analysts said the impact of Trump's new trade regime would not be positive for economic growth. "No real winners in trade conflicts," said Thomas Rupf, co-head Singapore and CIO Asia at VP Bank. "Despite some countries securing better terms, the overall impact is negative."
