Asian shares set for worst week since April after US tariff blitz
European stock markets are on track for a lower open, with Euro Stoxx 50 futures down 0.5 per cent. Both Nasdaq futures and S&P 500 futures slipped 0.2 per cent after earnings from Amazon failed to meet lofty expectations, sending its shares tumbling 6.6 per cent after hours.
Late on Thursday, President Donald Trump signed an executive order imposing tariffs ranging from 10 per cent to 41 per cent on US imports from foreign countries. Rates were set at 25 per cent for India's US-bound exports, 20 per cent for Taiwan's, 19 per cent for Thailand's and 15 per cent for South Korea's.
He also increased duties on Canadian goods to 35 per cent from 25 per cent for all products not covered by the US-Mexico-Canada trade agreement, but gave Mexico a 90-day reprieve from higher tariffs to negotiate a broader trade deal.
'The latest tariff announcement offers some surface-level clarity, but beneath it lies a fog of uncertainty,' said Thomas Rupf, Chief Investment Officer, Asia of VP Bank.
'Despite some countries securing better terms, the overall impact is negative. We're entering an era of higher barriers to trade, which will have an impact and hurt growth.'
MSCI's broadest index of Asia-Pacific shares outside Japan fell 1.1 per cent to bring the total loss this week to 2.2 per cent, the biggest since April. South Korea's KOSPI plunged 3.5 per cent while Taiwanese shares fell 0.5 per cent.
Japan's Nikkei dropped 0.6 per cent. Chinese blue chips fell 0.7 per cent and Hong Kong's Hang Seng index lost 0.8 per cent.
Overnight, Wall Street failed to hold onto an earlier rally. Data showed inflation picked up in June, with new tariffs pushing prices higher and stoking expectations that price pressures could intensify, while weekly jobless claims signalled the labour market remained on a stable footing.
Fed funds futures imply just a 39 per cent chance of a rate cut in September, compared with 65 per cent before the Federal Reserve held rates steady on Wednesday, according to the CME's FedWatch.
Much now will depend on the US jobs data due later in the day and any upside surprise could price out the chance for a cut next month. Forecasts are centred on a rise of 110,000 in July, while the jobless rate likely ticked up to 4.2 per cent from 4.1 per cent.
The greenback found support from fading prospects of imminent US rate cuts, with the dollar index up 2.5 per cent this week against its peers to 100, in the biggest weekly rise since late 2022.
The Canadian dollar was little impacted by the tariff news, having already fallen about 1 per cent this week to a 10-week low.
The yen was the biggest loser overnight, with the dollar up 0.8 per cent to 150.7 yen, the highest since late March. The Bank of Japan held interest rates steady on Thursday and revised up its near-term inflation expectations but Governor Kazuo Ueda sounded a little dovish in the press conference.
Treasuries were largely steady on Friday. Two-year Treasury yields were flat at 3.9510 per cent, while benchmark 10-year yields ticked up 2 basis points to 4.3781 per cent, after slipping 2 bps overnight.
In commodity markets, oil prices were little changed after falling 1 per cent overnight. US crude rose 0.1 per cent to $69.36 per barrel, while Brent was at $71.8 per barrel, up 0.1 per cent. – Reuters
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Irish Times
an hour ago
- Irish Times
Trump hails additional $100bn Apple investment in US
US President Donald Trump will announce an additional $100 million investment by tech giant Apple in its US manufacturing network, White House officials said on Wednesday. It comes as Apple tries to avoid US tariffs on imports that will impact the cost of iPhones and other products in the US. The announcement will be seen by the Trump administration as a big victory is his crusade to restore domestic manufacturing. But the scale of the investment will raise concerns in Irish Government circles about what it might mean for the company's commitment to its Irish manufacturing base, which employs more than 6,000 staff. The US president is hoping his threat of tariffs on imports will pressure companies to increase manufacturing inside the US, the stated aim of his America First agenda. READ MORE 'President Trump's America First economic agenda has secured trillions of dollars in investments that support American jobs and bolster American businesses,' White House spokeswoman Taylor Rogers said in a statement. 'Today's announcement with Apple is another win for our manufacturing industry that will simultaneously help reshore the production of critical components to protect America's economic and national security,' he said. In February, Apple said it planned to hire an additional 20,000 staff in the US over the next four years, as part of a $500 billion investment in the country during Trump's second term in office, a figure that is now expected to increase to $600 billion. The company made similar, smaller pledges during the Biden administration and Trump's first term, though it has not yet followed through on some of those promises. While Apple supports more than 450,000 jobs with thousands of suppliers and partners across 50 states, the president has been concerned at the company's plan to expand its manufacturing footprint in India. In May, Trump threatened Apple and other phone manufacturers with a 25% tariff on products made outside the United States. Bloomberg Intelligence analysts Anurag Rana and Andrew Girard said the latest Apple pledge of investment may 'soften the White House's ire' over Apple's heavy reliance on India for iPhone assembly. 'We anticipate Apple will focus on higher-end products, artificial intelligence labs and semiconductor engineering in the US, rather than mass-produced lower-end phones and accessories.' Mr Trump's announcement, which was reported earlier by Bloomberg, will include the creation of what the White House is calling the 'American Manufacturing Programme', which will focus on bringing more of Apple's supply chain and advanced manufacturing to the United States. The US president is hoping his threat of tariffs on imports will pressure companies to increase manufacturing inside the US, the stated aim of his America First agenda. The Apple announcement comes on the day that Mr Trump signed an executive order imposing an additional 25 per cent tariff on imports from India which, he said, was due to New Delhi's purchases of Russian oil. The order said the 25 per cent levies would be added to existing duties imposed on Indian imports in a move that will raise tensions with prime minister Narendra Modi's government. India has failed to reach a trade deal with Washington and was already facing 25 per cent tariffs on its exports to the US before Mr Trump's announcement. A 15 per cent tariff on most EU exports to the US is scheduled to come into force on Thursday. Both the European Commission and the While House had confirmed previously that the 15 per cent rate would include pharmaceuticals and semiconductors. However, comments by the US president on Tuesday when he warned of tariffs on pharmaceuticals of up to 250 per cent over coming years, naming Ireland as a target alongside China, will cause concern in Dublin. – Additional reporting Bloomberg, New York Times, Financial Times limited
Irish Independent
an hour ago
- Irish Independent
Apple to make further $100bn commitment to US manufacturing
Bloomberg US president Donald Trump will announce that Apple will commit to spend another $100bn (€86bn) on domestic manufacturing, the latest pledge by the tech giant to increase US production of its products as it seeks to avoid punishing tariffs on its flagship iPhones. The deal includes a new manufacturing program designed to bring more of Apple's supply chain to the US, with an eye towards manufacturing additional critical components domestically, according to a White House official who detailed the announcement on the condition of anonymity.
Irish Times
2 hours ago
- Irish Times
Wall Street boosted by string of upbeat corporate earnings
Global shares were mixed on Wednesday, with most big Wall Street equity indices nudging higher and European shares retreating. Dublin The picture at home was reasonably positive as Euronext Dublin outperformed European peers to finish the day up 0.7 per cent. However, food group Glanbia had a day to forget as it sank 4.7 per cent. A trader suggested the move was rooted in a number of negative reports for peer groups rather than any stock specific news for the company itself. 'One of them was Bellring in the US, which published third quarter results that disappointed the market,' he said. 'They were down a whopping 32 per cent on Tuesday and recovered about 5 per cent today.' READ MORE In the same sector, food giant Kerry Group finished down 1 per cent. Among the home builders, Glenveagh Properties was up 0.8 per cent, while Cairn Homes climbed 0.4 per cent. It was a good day for the banks as Bank of Ireland and AIB climbed 4 per cent and 3 per cent respectively. London British equities closed marginally higher as investors assessed a slew of corporate earnings and awaited an expected Bank of England rate cut on Thursday. The blue-chip FTSE 100 was up 0.2 per cent, rising for a third consecutive session after touching a four-month low on Friday. The domestically focused midcap FTSE 250 rose 0.1 per cent. Heavyweights Shell and BP boosted the benchmark index, up 1.3 per cent and 3.1 per cent respectively. Shares of miner Fresnillo continued gains from the previous session with an 8.9 per cent rise. Conversely, British healthcare stocks slipped 1.4 per cent after Trump said on Tuesday that Washington would initially place a 'small tariff' on pharmaceutical imports, eventually increasing it to 250 per cent. AstraZeneca and GSK were down 1.5 per cent and 1.7 per cent respectively. Europe Shares in European pharmaceutical companies sank to a four-month low after Trump repeated his threats to introduce tariffs on drug imports 'within the next week or so'. Europe's Stoxx Healthcare index slid by 2.8 per cent, falling to its lowest level since mid-April, shortly after the US president's initial 'liberation day' tariff announcements. Bayer, the German maker of products including aspirin, was one of the top fallers in Europe. Its shares slumped 9.9 per cent after the company reported a 5 per cent drop in pretax profit, excluding one-off items, for the first half of the year. The Cac 40 in Paris edged up 0.2 per cent, while the Dax 40 in Frankfurt rose 0.3 per cent. New York Wall Street gained, boosted by a string of largely upbeat corporate earnings, while growing expectations for a Federal Reserve interest rate cut provided additional support. At 11.18am eastern time, the Dow Jones Industrial Average was 0.22 per cent ahead; the S&P 500 advanced 0.54 per cent; and the Nasdaq Composite was up 0.72 per cent. Arista Networks was a standout, soaring 17.5 per cent to an all-time high after the cloud networking company projected current-quarter revenue above estimates. McDonald's was 2.8 per cent higher after the fast-food giant's affordable menu drove global sales past expectations. Global Payments also advanced 5.2 per cent after topping second-quarter profit forecasts, while Match Group, the parent of Tinder, jumped 14.1 per cent after surpassing revenue expectations for the same quarter. Apple jumped 5.2 per cent, providing the biggest boost to the S&P 500 index, as a White House official said the company would announce a $100 billion domestic manufacturing pledge. The stock was on track for its biggest single-day jump in nearly three months. In contrast, Advanced Micro Devices tumbled 7.7 per cent as its data centre chip revenue disappointed. Super Micro Computer plunged 20.7 per cent after missing fourth-quarter sales estimates, dragging rival Dell down 2.4 per cent. – Additional reporting: Agencies
