Markets Rise On Growing Rate Cut Hopes
The S&P 500 and Nasdaq finished at fresh highs Tuesday after US data showed a tamer-than-feared impact on prices from President Donald Trump's tariff blitz.
That boosted hopes among that the US Federal Reserve and its embattled chief Jerome Powell will cut interest rates next month.
"Jerome 'Too Late' Powell must NOW lower the rate," Trump said on Truth Social, while also threatening a "major lawsuit" over renovations to Fed buildings.
The US consumer price index reading for July showed annualised inflation at 2.7 percent, unchanged from a month earlier.
Investors calculated that the benign data was not enough to sway the Fed away from an expected interest rate cut next month.
"Stocks... took the (inflation) number as confirmation that September is shaping up to be the long-anticipated 'insurance cut' in an economy still treading water above the break-even line," said Stephen Innes at SPI Asset Management.
Katy Stoves, investment manager at Mattioli Woods, warned however: "This gentle cooling of the economy will certainly not justify a cut of interest rates to one percent as President Donald Trump is calling for."
Tokyo climbed 1.3 percent to a record high and Hong Kong rose 2.6 percent while Seoul, Shanghai, Taipei, Singapore, Kuala Lumpur, Bangkok and Jakarta also saw healthy gains.
Europe followed suit, with London, Frankfurt and Paris all higher in early trade.
Oil prices edged lower after OPEC raised its demand forecast for 2026, signalling it expected stronger global activity next year.
Investor focus was also on a summit in Alaska on Friday between Trump and Russian leader Vladimir Putin on the three-year-old Ukraine war.
In corporate news, AI firm Perplexity offered Google $34.5 billion for its Chrome web browser, which it may have to sell as part of antitrust proceedings.
Intel rose 5.5 percent on Wall Street after CEO Lip-Bu Tan met with Trump, who praised the executive after previously calling for him to step down.
Tokyo - Nikkei 225: UP 1.3 percent at 43,274.67 (close)
Hong Kong - Hang Seng Index: UP 2.6 percent at 25,613.67 (close)
Shanghai - Composite: UP 0.5 percent at 3,683.46 (close)
London - FTSE 100: UP 0.3 percent at 9,172.20
Euro/dollar: UP at $1.1718 from $1.1677 on Tuesday
Pound/dollar: UP at $1.3561 from $1.3501
Dollar/yen: DOWN at 147.39 yen from 147.77 yen
Euro/pound: DOWN at 86.41 pence from 86.45 pence
Brent North Sea Crude: DOWN 0.2 percent at $65.92 per barrel
West Texas Intermediate: DOWN 0.3 percent at $62.90 per barrel
New York - Dow: UP 1.1 percent at 44,458.61 (close)
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DW
10 hours ago
- DW
Why does the US use secondary sanctions, and do they work? – DW – 08/14/2025
Will Donald Trump's threat to use secondary sanctions slow Russian aggression or dampen its economy? Some see them as a powerful deterrent, while others think they are impossible to effectively enforce. After Russia launched its full-scale invasion of Ukraine in February 2022, the aggressor was hit with economic sanctions from the US, UK, European Union and others. These sanctions restricted domestic companies or individuals in how they trade and do business with Russia. The sanctions were an effort to make Russia change its course without resorting to direct military force. Since then, the sanctions have piled up. Russia's foreign assets have been frozen, and a majority of Russian banks have been cut off from the global banking system. To keep its economy going, Russia has redirected trade to other countries like China, India, Turkey and the United Arab Emirates. To move its oil around the world, the country has turned to a fleet of "shadow tankers." To end this game of economic cat and mouse and bring Russia to ceasefire talks, the US Senate is working to pass a bipartisan bill that threatens "secondary sanctions" on countries that still do business with Russia. Primary sanctions are placed on foreign countries or entities, but they restrict the behavior of the sanctioning country's own citizens and businesses by limiting or prohibiting them from engaging with the sanctioned parties. To view this video please enable JavaScript, and consider upgrading to a web browser that supports HTML5 video Secondary sanctions go a step further and extend to third-party countries, companies or individuals that do business with sanctioned parties. Even though these third-party entities aren't directly bound by the sanctioning country's laws, they are pressured to comply or face consequences should they do business in the sanctioning country. "Secondary sanctions do not attempt to force foreign subsidiaries to follow a sanctioning country's policies," according to John F. Forrer in a paper published by the Atlantic Council, a Washington, D.C.-based think tank. "The sanctioning country restricts its own firms and/or citizens from having commercial dealings with designated firms or individuals." The proposed US legislation would enable 500% tariffs on goods from any country that buys or sells Russian oil, uranium, natural gas and petroleum or petrochemical products. The United States is the biggest proponent of secondary sanctions. Their power stems from the importance of the US dollar on a global level and from the fear of losing access to the US market or its financial system. Since a significant amount of cross-border trade is in dollars or passes through the US banking system, this gives the country great leverage. For many countries, keeping this access is more important than doing business with sanctioned regimes. "While secondary sanctions can 'work' as part of the larger package, the intent, timing and credibility of the threat are important," said Lena Surzhko Harned, associate director of the Public Policy Initiative at Penn State Behrend. They are an important tool with symbolic power. "However, like all threats, it loses its power if it is not perceived as credible or other loopholes are found," Harned told DW. The Obama administration used secondary sanctions to target banks and other companies doing business in Iran in a successful effort to get the country to negotiate about limiting its nuclear program. More recently, the US has used secondary sanctions on Chinese firms trading with or handling financial transactions with North Korea. The US also introduced secondary sanctions against entities doing business with Venezuela, especially in the oil and financial sectors, in an effort to isolate the Nicolas Maduro regime. This past April, President Donald Trump imposed secondary tariffs on countries that import Venezuelan oil. This month, Trump issued an executive order, levying an additional 25% tariff on India over its purchases of Russian oil. Sidestepping Congress the president has threatened further secondary sanctions on buyers of Russian energy. Not every country is a pushover when it comes to secondary sanctions, and some find creative loopholes to avoid much of their economic impact. They rely on alternative currencies, such as the Chinese yuan or cryptocurrencies. Businesses or countries subject to sanctions can barter or use intermediaries or shell companies to conclude deals. Secondary sanctions are difficult to enforce and risk retaliation. They can also push like-minded countries closer together — and therefore further from US influence. There is a rift between academics and practitioners on secondary sanctions. Many experts think they are not an effective foreign policy tool, according to Forrer, an associate professor and director of the Institute for Corporate Responsibility at the George Washington University's School of Business. "Many researchers view secondary sanctions as having all the worst attributes of economic sanctions, plus the added onerousness of potentially instigating new conflicts with allies and adversaries who object to the imposition of restrictions and economic hardship on their own industries and citizens," argued Forrer. In the end, it is difficult to say what exactly makes a country change course with so many parallel variables to take into account. "Secondary sanctions should be considered an option when designing economic sanctions, but only under a very particular set of circumstances," concluded Forrer. "As with any economic sanction, if deployed incorrectly, they can do more harm than good." "Not to use secondary sanctions against third parties is a waste of a potentially useful tool," agreed Harned, but warned, "to expect them to be a silver bullet is a misguided mistake."
DW
10 hours ago
- DW
What are secondary sanctions and do they work? – DW – 08/14/2025
Will Donald Trump's threat to use secondary sanctions slow Russian aggression or dampen its economy? Some see them as a powerful deterrent, while others think they are impossible to effectively enforce. After Russia launched a full-scale invasion of Ukraine in February 2022, the aggressor was hit with economic sanctions from the US, UK, European Union and others. These sanctions restricted domestic companies or individuals in how they trade and do business with Russia. The sanctions were an effort to make Russia change its course without resorting to direct military force. Since then, the sanctions have piled up. Russia's foreign assets have been frozen, and a majority of Russian banks have been cut off from the global banking system. To keep its economy going, Russia redirected trade to other countries like China, India, Turkey and the UAE. To move its oil around the world, the country turned to a fleet of "shadow tankers." To end this game of economic cat and mouse, and bring Russia to ceasefire talks, the US Senate is working to pass a bipartisan bill that threatens "secondary sanctions" on countries that still do business with Russia. Primary sanctions are placed on foreign countries or entities, but they restrict the behavior of the sanctioning country's own citizens and businesses by limiting or prohibiting them from engaging with the sanctioned parties. To view this video please enable JavaScript, and consider upgrading to a web browser that supports HTML5 video Secondary sanctions go a step further and extend to third-party countries, companies or individuals that do business with sanctioned parties. Even though these third-party entities aren't directly bound by the sanctioning country's laws, they are pressured to comply or face consequences should they do business in the sanctioning country. "Secondary sanctions do not attempt to force foreign subsidiaries to follow a sanctioning country's policies," according to John F. Forrer in a paper published by the Atlantic Council, a Washington, D.C.-based think tank. "The sanctioning country restricts its own firms and/or citizens from having commercial dealings with designated firms or individuals." The proposed US legislation would enable 500% tariffs on goods from any country that buys or sells Russian oil, uranium, natural gas and petroleum or petrochemical products. The United States is the biggest proponent of secondary sanctions. Their power stems from the importance of the US dollar on a global level and from the fear of losing access to the US market or its financial system. Since a significant amount of cross-border trade is in dollars or passes through the US banking system, this gives the country great leverage. For many countries, keeping this access is more important than doing business with sanctioned regimes. "While secondary sanctions can 'work' as part of the larger package, the intent, timing and credibility of the threat are important," said Lena Surzhko Harned, associate director of the Public Policy Initiative at Penn State Behrend. They are an important tool with symbolic power. "However, like all threats, it loses its power if it is not perceived as credible or other loopholes are found," Harned told DW. The Obama administration used secondary sanctions to target banks and other companies doing business in Iran in a successful effort to get the country to negotiate about limiting its nuclear program. More recently, the US has used secondary sanctions on Chinese firms trading with or handling financial transactions with North Korea. The US also introduced secondary sanctions against entities doing business with Venezuela, especially in the oil and financial sectors, in an effort to isolate the Nicolas Maduro regime. This past April, President Donald Trump imposed secondary tariffs on countries that import Venezuelan oil. This month, Trump issued an executive order, levying an additional 25% tariff on India over its purchases of Russian oil. Sidestepping Congress the president has threatened further secondary sanctions on buyers of Russian energy. Not every country is a pushover when it comes to secondary sanctions, and some find creative loopholes to avoid much of their economic impact. They rely on alternative currencies, such as the Chinese yuan or cryptocurrencies. Businesses or countries subject to sanctions can barter or use intermediaries or shell companies to conclude deals. Secondary sanctions are difficult to enforce and risk retaliation. They can also push like-minded countries closer together — and therefore further from US influence. There is a rift between academics and practitioners on secondary sanctions. Many experts think they are not an effective foreign policy tool, according to Forrer, an associate professor and director of the Institute for Corporate Responsibility at the George Washington University's School of Business. "Many researchers view secondary sanctions as having all the worst attributes of economic sanctions, plus the added onerousness of potentially instigating new conflicts with allies and adversaries who object to the imposition of restrictions and economic hardship on their own industries and citizens," argued Forrer. In the end, it is difficult to say what exactly makes a country change course with so many parallel variables to take into account. "Secondary sanctions should be considered an option when designing economic sanctions, but only under a very particular set of circumstances," concluded Forrer. "As with any economic sanction, if deployed incorrectly, they can do more harm than good." "Not to use secondary sanctions against third parties is a waste of a potentially useful tool," agreed Harned, but warned, "to expect them to be a silver bullet is a misguided mistake."
Int'l Business Times
11 hours ago
- Int'l Business Times
Alaska: A Source Of Russian Imperial Nostalgia
Alaska, the US state that will host the meeting between Vladimir Putin and Donald Trump on Friday, is a source of imperial nostalgia and often less-than-serious territorial claims in Russia. The territory that Russia sold to the United States in 1867 is now a symbol of the entwined history of the countries, whose relations have been severely damaged since Russia launched its offensive in Ukraine in 2022. To some experts, the summit in Alaska evoked memories of the thaw between the Soviet Union and the United States during the Cold War. "It's a classically orchestrated summit, like in the era of detente," Russian political scientist Fyodor Lukyanov said on Telegram. "Its symbolic significance is the absence of intermediaries: the powers, so to speak, decide for themselves," he added, saying that China is "not close" to Alaska and that Europe is "as far away as possible". But beyond being a unique meeting place, Alaska also fuels Russian memories of the Tsarist empire, the historic predecessor of the Soviet Union. "For Russia, Alaska symbolises the peak of an expansion," Alexander Baunov, senior fellow at the Carnegie Russia Eurasia Center, said on the centre's website. It was "when the Russian continental empire had, for the only time, succeeded in crossing an ocean like the European empires", Baunov said. A Russian colony since the 18th century, Alaska was eventually sold to the United States for $7.2 million in 1867 by Tsar Alexander II. The remote territory was economically very difficult for the Russians to exploit and at the time its sale was welcomed by the Imperial Court as the country was struggling economically. But the transaction later came to be seen as a regrettable bargain after what formerly was a fur trading hub turned out to house crucial natural resources: gold and oil. In recent years, the price at which Alaska was sold, considered by some to be ridiculously low, and the legal validity of the transaction have become regularly recurring debates in Russia. In July 2022, in the midst of patriotic fervour in Russia and as tensions soared between Moscow and Washington following the offensive against Ukraine, the Alaska issue resurfaced. The speaker of the Duma, the lower house of the Russian Parliament, Vyacheslav Volodin, spoke of "lands to be returned", describing Alaska as a "disputed territory". Russia's authorities are apparently not interested in reclaiming it. In 2014, Vladimir Putin, asked by a pensioner about the possibility, replied: "My dear, why do you need Alaska?" adding the territory was "too cold". Still, the idea of reclaiming Alaska is an endless source of memes widely circulating on Russian social media. One of the most famous claims that "our soul" suffered from the loss of Alaska because "it's where our bears live". The recapture of Alaska is even mentioned in a 1990s hit by a rock band Putin likes, Lyube, with the lyrics: "Stop messing around, America... And give back our Alaskan lands." US President Donald Trump meets his Russian counterpart Vladimir Putin in Alaska on Friday AFP Some Russians mourn the loss of Alaska because 'it's where our bears live' AFP
