US: Dow advances, S&P 500 logs new record with boost from tariff pacts
The Dow Jones Industrial Average added 1.1 per cent to 45,010.29 while the broad-based S&P 500 Index bounced 0.8 per cent to 6,358.91.
The tech-focused Nasdaq Composite Index climbed 0.6 per cent to 21,020.02.
The gains came after President Donald Trump announced on Tuesday that Washington had reached tariff agreements with Japan and the Philippines, and as officials signaled optimism in trade talks with the European Union.
German Chancellor Friedrich Merz voiced optimism that EU and United States negotiators are making progress in talks to resolve a transatlantic trade row.
Several EU diplomats also said the bloc was examining a US proposal involving a baseline tariff of 15 per cent and sectoral carve-outs still to be decided.
An ongoing wave of company earnings reports also helped buoy major US indexes.
For the most part, 'companies are saying that they can deal with tariffs at the levels they're at,' shift supply chains or cope with modest price increases, said Pat Donlon of Fiduciary Trust Company.
'It will be interesting to see, though, some of the consumer discretionary companies that are more exposed to production in China, Vietnam, Malaysia, South Asia that report later in earnings season,' he said. AFP
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Straits Times
an hour ago
- Straits Times
Factory output in Germany lowest since Covid-19 pandemic in 2020
Sign up now: Get ST's newsletters delivered to your inbox FRANKFURT, Germany - German industrial production slumped in June to its lowest level since the Covid-19 pandemic in 2020, data showed on Aug 7, underlining the fragility of Europe's top economy even before US President Donald Trump's new tariffs kicked in. Factory output fell 1.9 per cent month-on-month, federal statistics agency Destatis said, steeper than a drop of 0.5 per cent forecast by analysts polled by financial data firm FactSet. There were particularly heavy falls in the machinery and pharmaceutical sectors, helping to drag overall output down to levels last seen in May 2020 during the coronavirus pandemic. Destatis also made a major revision to May industrial production data, saying the indicator fell 0.1 per cent. It had previously reported a healthy rise of 1.2 per cent. ING bank analyst Carsten Brzeski said the dire data could prompt a downward revision to an already poor initial estimate showing that the economy shrank slightly in the second quarter. 'This is bad news,' he said. 'At face value, industry remains stuck in a very long bottoming out.' Political setback Fixing the euro zone's traditional export powerhouse has been a key priority for Germany's new conservative Chancellor Friedrich Merz, with the economy battered in recent years by high energy costs and fierce Chinese competition. Top stories Swipe. Select. Stay informed. Singapore Liquor licences for F&B, nightlife venues extended to 4am in Boat Quay, Clarke Quay Singapore Chikungunya cases in Singapore double; authorities monitoring situation closely Singapore Student found with vape taken to hospital after behaving aggressively in school; HSA investigating Asia Cambodia, Thailand agree on Asean observers monitoring truce, but fundamental differences remain Asia Trump ratchets up tariff pressure on India, sparking despair among exporters and growth fears Singapore CDC and SG60 vouchers listed on e-commerce platforms will be taken down: CDCs Asia Australia's purchase of Japanese frigates signals a new era for Indo-Pacific security Singapore Some ageing condos in Singapore struggle with failing infrastructure, inadequate sinking funds Plans to spend hundreds of billions of euros on infrastructure upgrades and rearmament – combined with a series of brighter data releases since the start of the year – had raised hopes that the worst might be over for Europe's export champion. German business morale rose to its highest level in July after seven straight increases, while think-tanks including the respected DIW institute have revised growth forecasts up for 2025 and 2026. But hard data on business activity has not been as rosy, raising fears that the improved mood was down to unfounded optimism. Experts say better data early in the year was the temporary effect of US 'front-loading' as American customers rushed to get orders in before Mr Trump's tariffs took effect. 'Optimism still seems to be based on a big portion of wishful thinking and is not at all matched by current data,' Mr Brzeski said. 'For now, what looked like a cyclical rebound in the making has only been US front-loading.' Tariff troubles A new baseline US levy of 15 per cent on EU exports took effect on Aug 7, up from 10 per cent in effect since April, stiffening the tariff faced by Germany's exporters even while leaving many of them mired in uncertainty. Export data released on Aug 7 showed that German exports in June to the US – the country's biggest trading partner – fell 2.1 per cent, even as they rose 0.8 per cent worldwide. And data released on Aug 6 showed that industrial orders – closely watched as an indicator of future business activity – fell 1 per cent month-on-month in June, after dropping 0.8 per cent in May. The US is also carrying out investigations into sectors including pharmaceuticals and semiconductor equipment, heightening worries about worse to come. 'The tariffs are a big burden for German companies,' the head of the German chambers of commerce, Ms Helena Melnikov, told AFP. 'Don't forget that tariffs were usually between zero and about 2 per cent at the most beforehand.' 'It could even come out worse for a variety of sectors because negotiations are ongoing,' she added. 'It is a real setback and makes it harder to do business in Germany.' AFP
CNA
an hour ago
- CNA
US expects US$50 billion in monthly tariff revenue, Commerce chief says
WASHINGTON: The United States expects to collect US$50 billion or more in tariff revenues each month as higher levies on imports from dozens of countries take effect, Commerce Secretary Howard Lutnick said on Thursday (August 7). The new figure represents a sharp increase from US$30 billion in monthly tariff income reported last month. "And then you're going to get the semiconductors, you're going to get pharmaceuticals, you're going to get all sorts of additional tariff money coming in," Lutnick told Fox Business Network. TARIFFS ON CHIPS AND PHARMA TO BE ANNOUNCED US President Donald Trump's latest wave of tariffs took effect on Thursday, raising the average import duty to its highest level in a century. Countries now face tariffs ranging from 10 to 50 per cent. Trump on Wednesday also announced plans to impose a 100 per cent tariff on imported semiconductor chips unless companies commit to manufacturing in the US. Pharmaceutical imports will face a smaller initial tariff that could rise to 250 per cent over time. Details of these sector-specific tariffs are expected in the coming weeks, pending the outcome of Commerce Department investigations into whether the imports pose national security risks. "His objective is to get semiconductor manufacturing done here," Lutnick said, predicting the effort could generate up to US$1 trillion in investment to strengthen domestic manufacturing. EXEMPTIONS POSSIBLE FOR CHIPMAKERS Lutnick said companies could win exemptions from the proposed chip tariffs if they submit plans to build semiconductor plants in the US and have those projects verified by independent auditors. Some exemptions have already been granted, including to the European Union, which agreed to a 15 per cent tariff covering chips and other exports as part of a broader deal. Japan has also said Washington committed not to impose a worse tariff rate than other countries on semiconductors and pharmaceuticals. The push to revitalise the domestic chip industry predates Trump's latest moves. In 2022, Congress approved a US$52.7 billion subsidy programme under then-President Joe Biden to support semiconductor manufacturing and research. All five of the world's leading-edge chipmakers have since announced plans to establish factories in the United States. The Commerce Department said last year that US chip production had declined from 40 per cent of global output in 1990 to just 12 per cent. CHINA TARIFF TRUCE EXTENSION LIKELY 'It feels likely that they're going to come to an agreement and extend that for another 90 days,' Lutnick said. 'But I'll leave it to that team.'
CNA
an hour ago
- CNA
Japan Inc split on Trump tariffs as automakers brace for deeper hit
TOKYO: US President Donald Trump's tariffs are cleaving Japan Inc, with some major exporters like Toyota Motor slashing profit forecasts, while others such as Sony and Honda say the impact may be less severe than initially feared. As Trump's levies on global shipments into the United States took effect on Thursday (August 6), Japan's top companies offered a mixed picture of how the tariffs, and a stronger yen are affecting America's fifth-largest trading partner. Uncertainty surrounding the tariffs and their erratic implementation has rattled companies worldwide, as governments scramble to strike deals and shield major exporters from further disruption. While some glimmers of optimism have emerged, Japanese firms remain uneasy about when Trump might lower tariffs on Japanese automobiles and whether new duties will target pharmaceuticals and semiconductors. AUTOMAKERS UNDER PRESSURE A Trump move targeting semiconductors with 100 per cent tariffs on some chip imports hit Japanese supply-chain firms on Thursday, even as shares of other companies with US expansion plans rose. Tokyo on Thursday urged Washington to swiftly implement last month's bilateral agreement to reduce US tariffs on Japanese car imports to 15 per cent, down from the 27.5 per cent in place since Trump's April tariff hike. Two weeks after Trump announced the deal, which he said includes US$550 billion in Japanese investments and loans, Tokyo is still working to clarify its terms, adding further uncertainty for corporate planners. 'It's honestly very difficult for us to predict what will happen regarding the market environment,' said Takanori Azuma, head of finance at Toyota, the world's largest automaker. Toyota cut its operating profit forecast for the business year ending in March by 16 per cent to 3.2 trillion yen (US$21.7 billion), citing the stronger yen and tariff-related costs. Despite the impact, Azuma said the company would continue making cars for US customers. 'Even at this point, incentives are very low and inventory is limited, so many customers are waiting. That's true not only in the US, but also in Japan,' he said. Japanese carmakers have been among the hardest hit by the trade dispute, as they try to avoid raising prices and instead absorb the cost increases in their margins. CHIPMAKERS AND EXEMPTIONS In contrast, Sony raised its full-year profit forecast by 4 per cent to 1.33 trillion yen (US$9 billion), saying the estimated tariff impact had dropped to 70 billion yen, down from 100 billion yen previously. Subaru said the tariff impact on its vehicles had also been reduced but warned it remained significant. Honda on Wednesday (August 5) cut its projected tariff impact by 31 per cent to 450 billion yen, but said 'there are still many unknowns'. As for chips, Trump offered a key exemption: the 100 per cent tariff would not apply to companies manufacturing in the US or committed to doing so. While Japan is the largest foreign investor in the United States — with holdings worth US$819 billion at the end of 2024, according to US government data — its semiconductor industry has been reluctant to commit to large-scale US manufacturing. Shares of Japanese chip equipment maker Tokyo Electron fell 2.7 per cent on Thursday, while testing equipment firm Advantest slipped nearly 1 per cent. By contrast, chipmakers with large US expansion plans posted gains, with Taiwan's TSMC up 5 per cent and South Korea's Samsung rising 2.5 per cent. TRADE BALANCE AND CONCERNS
