Wall Street hits records as investors bet on more trade deals, but global markets lag
US President Donald Trump cautioned that striking a deal with the European Union to reduce import tariffs will be a challenge. Trump has set an August 1 deadline for an accord.
'I would say that we have a 50/50 chance, maybe less than that, but a 50/50 chance of making a deal with the EU,' Trump told reporters at the White House yesterday.
But US investors have adopted an optimistic stance about further accords given Trump's record of suspending or delaying the most onerous tariffs. The S&P 500 finished at a fifth straight record and the tech-rich Nasdaq at a third straight record, capping an upbeat week.
Equity markets elsewhere were more subdued.
London, after a strong run on positive corporate news, finished slightly lower as did Frankfurt, while Paris closed just ahead after Asia lost ground.
'There is no unifying theme across financial markets this month — instead markets are moving to the beat of their own drums,' concluded Kathleen Brooks, research director at XTB.
Sentiment had been lifted earlier in the week by the announcement of a Japan-US deal, as well as signals that the EU could be closing in on its own accord with Washington.
The 'momentum has not been kept up, and European stocks are weaker at the end of the week,' noted Brooks.
The EU is still forging ahead with contingency plans in case talks fail, with member states approving a €93 billion (RM461.5 billion) package of retaliatory counter-tariffs.
With few positive catalysts to drive buying, Asian markets turned lower heading into the weekend.
Tokyo retreated after a two-day rally and Hong Kong declined following five days of gains. Shanghai was also down.
The dollar gained against major currencies, a reversal of the trend throughout much of 2025. The dollar fell the most in the first six months of 2025 since 1973.
Trump said yesterday that a weaker dollar can boost exports and tourism.
'It doesn't sound good, but you make a hell of a lot more money with a weaker dollar, not a weak dollar, but a weaker dollar, than you do with a strong dollar,' he told reporters at the White House.
In corporate news, German auto giant Volkswagen said US tariffs had cost it 1.3 billion euros (US$1.5 billion) in the first half of the year as it reported falling profits.
After an initial drop, shares in the carmaker rose four per cent in Frankfurt.
German sportswear maker Puma saw its shares tumble around 16 per cent after slashing its sales forecast and warning of a full year loss.
Intel dropped 8.5 per cent after reporting a US$2.9 billion loss as it announced further cost-cutting initiatives. The company said it has cut about 15 per cent of its workforce. — AFP
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Trivial pursuit? Not anymore — Trump's tariffs are making tabletop gaming a costly business in US
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'We are rushing now to complete trade deals as part of our effort to expand markets,' Mr Susiwijono said, when asked by The Straits Times during the panel discussion. 'In the past two weeks, we have been travelling to a number of countries... and we have achieved concrete results,' he had said at the session. When asked by ST about the impact of the Indonesia-EU deal, Mr Edwin Kadir, Bank UOB Indonesia's executive director, said: 'Palm oil, coffee bean, aroma essence (fragrance) are among the sectors that would most benefit from wider access to the European markets.' The US has set a 19 per cent tariff on most goods from Indonesia under a new agreement. Certain goods, including processed nickel, coffee beans and others that are not produced by the US, may get a lower rate. The 19 per cent rate, decided on July 15, is significantly lower than the 32 per cent announced by the Trump administration in April. The US tariff is set to take effect on Aug 1. Mr Susiwijono said that the expected deal with the EU will take effect in 2026. Indonesian President Prabowo Subianto and European Commission President Ursula von der Leyen had expressed their shared commitment in Brussels on July 13 to concluding the negotiations of the Indonesia-European Union Cepa, or IEU Cepa, a pact that has been under negotiation for the past 10 years. Technical teams have put the deal under a 'legal scrubbing process' before a slated agreement signing by both leaders in September, said Mr Susiwijono, referring to the pact's final review and refinement. 'This IEU Cepa would be a game changer for Indonesia. Imagine our exports of Nike, Adidas shoes to Europe, compared with the same products from Vietnam, which has a free trade deal with the EU, hence a zero per cent tariff,' he said. With no trade deal, shoes shipped to Europe from Indonesia have a 20 per cent tariff rate. 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The current No.1 destination for Indonesian exports is China, which accounted for about 23 per cent of total exports in dollar value in 2024, led by coal, palm oil and nickel, according to Indonesia's statistics agency (BPS). The total exports to China were valued at US$65.84 billion (S$84.34 billion) in 2024. Indonesia's second-biggest export market is the US, with about 9.3 per cent of total exports in 2024, valued at US$28.18 billion, comprising mostly apparel, footwear, machinery and electrical goods. This is followed by Japan (8.51 per cent, mostly industrial goods and mineral fuels); India (8 per cent, led by coal, palm oil and rubber); and Singapore (5 per cent, mostly re-exported goods). The EU market accounted for US$21.47 billion in 2024, or 7.4 per cent, of Indonesia's total exports in 2024, according to BPS. The Netherlands and Germany are the top two European importers of Indonesian goods, including chemical products, vegetable oil, cocoa beans, footwear and electrical equipment. Indonesia, meanwhile, imports vehicles, pharmaceuticals, electronic and medical instruments, among others, from the EU. Mrs Shinta Kamdani, chairwoman of Apindo, the Indonesian Employers' Association, said the business sector has been looking forward to seeing the completion of the IEU Cepa deal, and it has been involved in the negotiation for the last decade. A Cepa does not just give market access but is also about capacity-building and cooperation, Mrs Shinta said in a July 23 panel discussion organised by the Jakarta Foreign Correspondents Club. She said that as European buyers have high standards for imported products, the two parties need to work closely to reach common ground. 'It is not only about signing an agreement, but (also) how we can utilise the agreement,' Mrs Shinta said, pointing to Indonesia's separate Cepa with Australia, which has been working well. 'A good example is with the Australians. We work very closely with our government, set up a task force on trade and investment, and the Australian government is supporting us,' she added. The Indonesia-Australia Cepa came into effect on July 5, 2020, after the Parliaments of both countries ratified the deal following the official signing on March 4, 2019. Mr Fithra Hastiadi, senior adviser to the Presidential Communication Office, concurs with Mrs Shinta on the EU's high standards for goods, adding that Indonesia's wider access to the market would help the country gain easier access to other markets. 'It creates a positive signalling effect, which in turn will help Indonesia enter other markets,' Mr Fithra said. - The Straits Times/ANN
