Wall Street hangs near all-time high as PepsiCo, United Airlines stocks soar
New York
Wall Street is hanging near its records on Thursday following some better-than-expected updates on the economy and a mixed set of profit reports from big US companies.
The S&P 500 was up 0.2 percent in morning trading and just a bit below its all-time high set a week before. The Dow Jones Industrial Average was up 59 points, or 0.1 percent, as of 10:45 am Eastern time, and the Nasdaq composite was adding 0.5 percent to its record set the day before.
Trading was calmer than Wednesday's, when President Donald Trump jolted financial markets by saying he had discussed the ''concept'' of firing the chair of the Federal Reserve but was unlikely to do so. Such a move could help Wall Street get the lower interest rates it loves but would also risk a weakened Fed unable to make the unpopular moves needed to keep inflation under control.
A strong profit report from Taiwan Semiconductor Manufacturing Co helped drive tech stocks, and its net income soared nearly 61 percent in the last quarter from a year earlier. The chip maker said it's seeing strong demand from artificial-intelligence and other customers, and its stock that trades in the United States rose 2.9 percent.
Other stocks involved in AI also climbed, and a 0.9 percent gain for Nvidia was one of the strongest forces pushing upward on the S&P 500.
PepsiCo jumped 6.3 percent after delivering revenue and profit that topped Wall Street's expectations. The drink and snack giant stood by its financial forecasts given in April, which projected lower full-year profit than previous forecasts due to increased costs from tariffs and a pullback in consumer spending.
United Airlines flew 2.8 percent higher after reporting a stronger profit for the latest quarter than analysts expected. It also said it's seen an acceleration in demand from customers that began in early July, and it's expecting less uncertainty about the economy to hurt its business in the second half of this year.
Lucid Group's stock surged 30.3 percent after it said Uber is aiming to use 20,000 or more of its vehicles over six years in a robotaxi program. Using an autonomy system by Nuro, it expects to launch ''later next year in a major US city.''
Uber, which plans to invest hundreds of millions of dollars in Lucid and Nuro, saw its stock edge down by 0.6 percent.
On the losing side of Wall Street was Abbott Laboratories, which fell 7.2 percent despite delivering results for the latest quarter that edged past analysts' expectations. The health care company cut the top end of its forecasted range for revenue growth over 2025.
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Al Jazeera
an hour ago
- Al Jazeera
Trump talks tough on Russia, but will he follow through?
On July 14, United States President Donald Trump teased a sea change in his approach to Russia's war against Ukraine. Trump declared he would send significant additional air defence units to Ukraine, whose cities are now subject to an average onslaught of more than 100 Russian drones and missiles daily. Leaks from the White House even claimed Trump had inquired with Ukrainian President Volodymyr Zelenskyy in a preceding phone call about what offensive weaponry Kyiv needed to hit Moscow directly. Trump also made his most explicit sanction threat to date, proposing a 100 percent 'secondary tariff' on countries that buy Russian oil, if the Kremlin does not agree to a ceasefire in 50 days, by September 3. But Trump's tough talk has fallen far short of moving the dial. Russian officials have laughed off his claims about hitting Moscow. Air defence deliveries may lower the damage from Putin's aerial onslaught, but delivering them in anything like the numbers Trump floated will take many months. Trump's sanctions threat has not moved markets, though such a restriction would amount to an attempted blockade of the world's third-largest oil producer. That Trump has shifted his approach to Russia should, however, come as no surprise. Despite Trump's apparent personal affinity for Russian President Vladimir Putin, regarding Ukraine and Russia, his view of key US strategic interests is fundamentally opposed to Putin's. Trump wants to export more US natural gas; Putin wants to do the same with Russia's gas, having lost his European pipeline market. Trump cares about Greenland because he recognises the importance of Arctic shipping routes in the future, and for Russia, its rival Arctic shipping route is a key factor in maintaining Chinese support. Putin wants to seize as much of Ukraine's mineral resources for Russia as he can; Trump wants to do the same for Washington. Having failed in his inaugural pledge to settle the conflict within a day, something he now admits was an exaggeration, Trump's longstanding hostility towards Zelenskyy – a legacy of Trump's first impeachment scandal, which resulted from an attempt to extort blackmail on the Biden campaign from Zelenskyy – was eased after Kyiv agreed to a long-term strategic alignment with Washington on those minerals. Trump has, if belatedly, recognised that Putin has not been negotiating in good faith. No progress was made in the May and June peace talks between Kyiv and Moscow, with both sides just showing up to please Trump and try to win him over to their respective positions. Trump's realisation may have come from the fact that Putin increased his demands amid those negotiations. He not only continued to insist on the occupation of all of the southern and eastern Ukrainian regions he claims to have annexed, though never fully occupied, but added that Russia would need a 'buffer zone' in northern Ukraine as well. The change in Trump's approach has thus far had a muted impact for two reasons. Firstly, because his threat of the Russian oil tariff is not credible on its own. Trump has been extremely wary of high oil prices, or even the potential for them to rise. In the aftermath of his June strikes on Iran, he publicly decried the subsequent spike in oil markets. But it is also doubtful that the secondary tariff threat alone will work. Trump first used a similar threat to target Venezuelan oil exports at the end of March, and while Venezuelan exports declined, they have since recovered as Beijing has expanded purchases. Especially as it is in the middle of its own tariff war with Trump, which has already seen him threaten tariffs even above 100 percent, there is little chance Beijing, Russia's largest oil buyer, will care about a similar threat on Russian production. Additionally, Trump's decision to play for time with his threat is likely to delay passage of a Senate bill imposing additional sanctions on Russia, though 83 of 100 members of the chamber have co-sponsored it. The Republican Party's leadership in the Senate and the House are wary of being seen to goad Trump on the issue, lest it risk blowback from Trump, who demands near-universal authority and deference on policymaking from his party. Nevertheless, while Trump has gotten Europe to agree to be more public in accepting its costs of supporting Kyiv – which cumulatively were larger than the US's even before Trump began his second term, despite his assertions to the contrary – it will continue to be US equipment and technology that drive Kyiv's ability to resist or turn the tide. And delivering new arms to Ukraine and training its forces to use them will take time. Trump will also have to change his approach. Increasing economic pressure on Russia that can force Putin to treat negotiations seriously is not something that the US can achieve alone. It is made only harder to achieve when Washington spars with its allies and partners. With regards to additional restrictions on Russian oil, Trump may not have much chance of convincing Russia to go along, but such restrictions could jolt India to change its approach. New Delhi has gone from being a negligible purchaser of Russian oil before the full-scale invasion to its second-largest market, with 40 percent of India's imports now coming from Russia. India's Petroleum Minister Hardeep Singh Puri last week noted the country would not change its approach. He emphasised New Delhi has complied with previous restrictions, including the oil price cap, which the Biden administration engineered together with G7 allies in 2022 to actually keep Russian oil flowing, just limiting its revenues therefrom. They too were wary of market disruption, as Trump is today, with Biden's Treasury Secretary Janet Yellen even explicitly supporting the structure as a way to secure oil 'bargains' for India and other developing markets. But the minister did note that if there was an international agreement on shifting Russian oil purchases, then New Delhi could change its approach. If Trump wants his threats against Moscow to be credible, he will have to embrace a multilateral approach. Some steps are easy to do. As Trump's administration has thus far resisted additional sanctions, Brussels and Westminster have taken the lead in targeting Russia's 'shadow fleet' aimed at evading sanctions and the price cap, and engineering new sanctions proposals, including proposing tweaks to the oil price cap to lower it further when prices are soft. Two European Union sanctions packages have been agreed in the last six months, the second on July 18, and Trump should swiftly match their measures. If Europe can also be convinced to support a secondary tariff or other sanctions on Russian oil purchasers, that measure too would be far more likely to be effective. Additionally, Trump can target Russia's additional liquefied natural gas (LNG) exports by finally blacklisting Novatek, its key LNG exporter. Europe has not been willing to go that far yet, instead seeking only a phaseout of its purchases by the end of next year. But because the market for LNG tankers is much smaller than the oil market, earlier US sanctions on Russian LNG projects have proven much harder to evade. Russia's economy is finally struggling under the costs of Putin's war and all the sanctions he has brought upon his country in response to his aggression. Russian banks are reportedly holding preliminary discussions on the terms of state bailouts. But amid this pain, Russia claims to have seized a town in Ukraine's Dnipropetrovsk region for the first time – a claim Kyiv denies and which remains unverified. Trump can have a far more significant impact on the course of the war by reversing his resistance to Ukrainian attacks on the Kremlin's energy assets. Trump may have declared a new approach to Russia, but whether it goes beyond mere rhetoric will depend on his willingness to work with partners and allies and acknowledge the costs of such pressure. The views expressed in this article are the author's own and do not necessarily reflect Al Jazeera's editorial stance.
Al Jazeera
5 hours ago
- Al Jazeera
Can Donald Trump fire Jerome Powell, US Federal Reserve chair?
President Donald Trump is sending mixed messages about whether he will fire Federal Reserve Chair Jerome Powell. Trump said on July 16 he is 'not planning on doing anything' when asked if he would fire Powell. However, he also said he doesn't 'rule out anything' and mentioned a renovation project with ballooning costs. 'I think it's highly unlikely unless he has to leave for fraud,' Trump said. 'And it's possible there's fraud involved with the $2.5, $2.7 billion renovation. This is a renovation, how do you spend $2.7 billion? And he didn't have proper clearance.' The Federal Reserve has been undergoing building renovations since 2021 on a project that the board that controls the Fed first approved in 2017. The project's cost of $2.5bn is about $600m above the original budget, according to The Associated Press. The cost has increased because of design changes, increasing labour and material costs and 'unforeseen conditions', such as 'more asbestos than anticipated', the Fed said in an FAQ. But Trump's administration seems to be using the renovation as a possible reason to oust Powell. Russ Vought, director of the Office of Management and Budget, sent Powell a July 10 letter saying the project is 'out of compliance with the approved plan' and 'in violation of' the National Capital Planning Act, which outlines how agencies can make changes to federal buildings. Trump's feud with Powell isn't new. For months, the president has criticised Powell, whom he appointed to the role in 2017, for refusing to drop interest rates. The Fed raised interest rates in 2022 and 2023 during former President Joe Biden's administration as a response to inflation. Since Trump entered the White House in January, he has told Powell to resign and threatened to fire him. 'If I want him out, he'll be out of there real fast, believe me,' Trump said in April. 'I'm not happy with him.' In November, after the 2024 election, reporters asked Powell if he would step down or whether he thought Trump had the authority to fire him. 'Not permitted under the law,' Powell said. Trump spoke to a group of Republican lawmakers on July 15 about firing the chair, several news organisations reported. Trump showed lawmakers a draft letter firing Powell, The New York Times reported. Trump denied having written a letter. 'No, I talked about the concept of firing him. I said, 'What do you think?' Almost every one of them said I should,' Trump said. 'But I'm more conservative than they are.' While Trump attributed his reticence to fire Powell to his 'conservatism', the bigger impediment is a question of legality. Here's why. What is the role of the Federal Reserve; who appoints its chair? The Federal Reserve is the country's central bank. Its responsibilities include setting interest rates and supervising and regulating banks. It was created in 1913 as part of the Federal Reserve Act and is run by an independent board of governors. The seven governors that make up the board are nominated by the president and confirmed by the Senate. The president selects the chair and two vice chairs from among the seven, according to the Congressional Research Service. While talking to reporters, Trump appeared to overlook that he was the person who nominated Powell to be the chair in 2017: 'I'm surprised he was appointed,' Trump said. 'I was surprised, frankly, that Biden put him in and extended him.' In 2021, Biden nominated him for a second four-year term, which is set to end in May 2026. After that, Powell can remain on the board of governors until January 2028. Can the president fire the Federal Reserve chair? Unlike other government agencies, the Fed has a lot of independence from Congress and the White House, the Congressional Research Service said in a January report. According to the report, economists have justified the independence, saying that decisions about monetary policy shouldn't be influenced by political pressures. To ensure Fed accountability, the chair testifies before Congress, much like other government agencies. The Fed chair can be removed 'for cause by the President', according to the law. This refers to 'inefficiency, neglect of duty, or malfeasance in office', according to a Supreme Court decision about the Federal Trade Commission. In May, the Supreme Court ruled on Trump's authority to fire members of two different independent agencies. In its 6-3 ruling, the Court granted the Trump administration's emergency request to fire the heads of the agencies while the case over the legality of firing them played out in the courts. In its opinion, the Supreme Court addressed the Fed, saying its ruling didn't affect the agency. 'The Federal Reserve is a uniquely structured, quasi-private entity that follows in the distinct historical tradition of the First and Second Banks of the United States,' the Supreme Court said. Some legal experts question the legality of Trump firing Powell. Any move to oust him would likely end up in the courts. Peter Conti-Brown, a professor of financial regulation at the University of Pennsylvania, said the Fed's building renovation costs aren't 'cause' for Powell's dismissal. 'There is no factual basis to support any conclusion that the cost overruns on the renovation project constitute anything like fraud or gross negligence,' Conti-Brown said. 'Had Powell committed fraud, in this context or any other, there could well be a case for his removal.' Conti-Brown said that Trump has long talked about wanting Powell's removal. A court may consider Trump citing the renovation's budget as 'pretext' for his firing – a legal term used to describe a false reason an employer gives for firing an employee in order to cover the real reason, Conti-Brown said. 'Courts evaluating any attempted removal after the fact will assess both the animus and pretext very heavily against President Trump,' Conti-Brown said. However, it is unclear how courts would react because 'this is uncharted legal territory', Jeremy Kress, a former Fed banking regulator who is a faculty director of the University of Michigan's Center on Finance, Law and Policy, told The New York Times. Lev Menand, a legal scholar at Columbia University, agreed with Kress. 'In normal times, I would say Powell wins 10 times out of 10,' Menand told The New York Times. 'But these aren't normal times, because this court has shown that it is willing to look the other way when the president engages in illegal conduct and it is willing to construe the president's power under the Constitution as so broad as to allow the president to flout laws.'
Al Jazeera
7 hours ago
- Al Jazeera
EU hits Russian oil, shadow fleet with new sanctions over Ukraine war
The European Union has approved a new raft of stiff sanctions against Russia over its war in Ukraine, including a lower oil price cap, a ban on transactions with Nord Stream gas pipelines, and the targeting of more shadow fleet ships. 'The message is clear: Europe will not back down in its support for Ukraine. The EU will keep raising the pressure until Russia ends its war,' EU foreign policy chief Kaja Kallas said in a statement on Friday. Kallas said the EU move amounts to 'one of its strongest sanctions packages against Russia to date' linked to the war, which is now in its fourth year. It comes as European countries start to buy United States weapons for Ukraine to help the country better defend itself. US President Donald Trump announced the deal to supply more weapons to Ukraine and threatened earlier this week to impose steep tariffs on Russia unless a peace deal is reached within 50 days. The European Commission, the EU's executive branch, had proposed to lower the oil price cap from $60 to $45, which is lower than the market price to target Russia's vast energy revenues. The EU had hoped to get major international powers in the Group of Seven countries involved in the price cap to broaden the impact, but conflict in the Middle East pushed up oil prices and the US administration could not be brought on board . In 2023, Ukraine's Western allies limited sales of Russian oil to $60 per barrel , but the price cap was largely symbolic as most of Moscow's crude – its main moneymaker – cost less than that. Still, the cap was there in case oil prices rose. Oil Russia's main source of income The linchpin of Russia's economy is oil income, allowing President Vladimir Putin to pour money into the armed forces without worsening inflation for everyday people and avoiding a currency collapse. The EU has also targeted the Nord Stream pipelines between Russia and Germany to prevent Putin from generating any revenue from them in future, notably by discouraging would-be investors. Russian energy giant Rosneft's refinery in India was hit as well. The pipelines were built to carry Russian natural gas to Germany but are not in operation. They were targeted by sabotage in 2022, but the source of the underwater explosions has remained a major international mystery. Additionally, the new EU sanctions are targeting Russia's banking sector, with the aim of limiting the Kremlin's ability to raise funds or carry out financial transactions. Two Chinese banks were added to the list. The EU has slapped several rounds of sanctions on Russia since Putin ordered the invasion of Ukraine on February 24, 2022. But each round of sanctions is getting harder to agree, as measures targeting Russia bite the economies of the 27 member nations. Slovakia held up the latest package over concerns about proposals to stop Russian gas supplies, which it relies on.
