Stocks retreat as traders cautious before Fed rates call
6 May 2025 20:12
LONDON (AFP)Stock markets mostly dropped on Tuesday as investors awaited a US Federal Reserve interest-rate decision for signs of the outlook for the tariffs-hit economy.Oil prices staged a comeback after tanking on news of an output hike by key OPEC+ producers that came despite growing concerns over a slowdown in the global economy, which could hit demand.Wall Street's main three indices were lower in midday trading."Traders appear to be taking profits and moving to the sidelines ahead of the Federal Reserve's FOMC meeting, which kicks off today," said David Morrison, senior market analyst Trade Nation.The US Federal Reserve is expected to hold interest rates steady on Wednesday, even as President Donald Trump pushes for more cuts.While data last week showed the US economy contracted in the first quarter, strong jobs and services sector figures suggest there is still some resilience."It's a big week for central bank interest rate decisions," noted AJ Bell investment director Russ Mould."The key focus will be on forward-looking commentary and whether the Fed is getting worried about Trump's tariffs," Mould added.The US dollar was lower against major rival currencies.On Thursday, the Bank of England is expected to cut its key rate by a quarter point to 4.25 percent amid concerns of weak growth in Britain.In Europe, Frankfurt's stock market shed 0.4 percent after German conservative leader Friedrich Merz was confirmed as chancellor following an initial setback.Paris also ended the day down 0.4 percent while London finished flat.In Asia, stock markets benefited from some renewed optimism that governments are making progress in agreements to temper Trump's levies, which have roiled global markets in recent months.US Treasury Secretary Scott Bessent told CNBC that the Trump administration had been approached by 17 countries and offered "very good" trade proposals.He also said there could be "substantial progress in the coming weeks" with China, which has been hit with tariffs of 145 percent.Hong Kong and Shanghai stock markets closed higher as investors returned from a long weekend.
Stock Markets
Continue full coverage
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Gulf Today
2 hours ago
- Gulf Today
Weekly jobless claims hit 7-month high; imports post record decline
The number of Americans filing new applications for unemployment benefits increased to a seven-month high last week, pointing to softening labour market conditions amid mounting economic headwinds from tariffs. The report from the labour Department also continued to show workers losing their jobs having a tough time landing new opportunities as uncertainty caused by President Donald Trump's aggressive trade policy leaves employers reluctant to increase headcount. The data included the Memorial Day holiday, which economists said could have caused difficulties with the seasonal adjustment and likely contributed to the second straight weekly increase in unemployment claims. Still, they said the report offered some evidence of labour market strains. 'We won't dismiss the rise in claims over the last two weeks, which may be signaling weakening labour market conditions in response to the Trump administration's tariff policies and uncertainty,' said Nancy Vanden Houten, lead US economist at Oxford Economics. 'However, seasonal quirks might have contributed to the rise in claims.' Initial claims for state unemployment benefits rose 8,000 to a seasonally adjusted 247,000 for the week ended May 31, the highest level since last October. Economists polled by Reuters had forecast 235,000 claims for the latest week. With the start of the school holidays this month, claims could remain elevated as some states allow non-teaching staff to collect benefits. There were notable rises in unadjusted claims in Kentucky and Tennessee, likely related to layoffs in the motor vehicle industry amid duties on imported parts. Claims surged in the prior week in Michigan, attributed to layoffs in the manufacturing industry. But companies are generally hoarding workers after struggling to find labour during and after the COVID-19 pandemic. The Federal Reserve's Beige Book report on Wednesday showed 'comments about uncertainty delaying hiring were widespread,' noting that 'all districts described lower labour demand, citing declining hours worked and overtime, hiring pauses and staff reduction plans.' It said while some districts reported layoffs in certain sectors, 'these layoffs were not pervasive.' Stocks on Wall Street were higher. The dollar was steady against a basket of currencies. US Treasury yields rose. The number of people receiving benefits after an initial week of aid, a proxy for hiring, slipped 3,000 to a seasonally adjusted 1.904 million during the week ending May 24, the claims report showed. The elevation in the so-called continuing claims aligns with consumers' ebbing confidence in the labour market. SLACKENING labour MARKET The claims data have no bearing on the labour Department's closely watched employment report for May, scheduled to be released on Friday, as it falls outside the survey period. Nonfarm payrolls likely increased by 130,000 jobs last month after advancing by 177,000 in April, a Reuters survey of economists showed. The unemployment rate is forecast being unchanged at 4.2%. 'A gradual but genuine slackening of the labour market is underway,' said Oliver Allen, senior US economist at Pantheon Macroeconomics. There was, however, some welcome news on the economy. A separate report from the Commerce Department's Bureau of Economic Analysis showed the trade deficit narrowed sharply in April, with imports decreasing by the most on record as the front-running of goods ahead of tariffs ebbed, which could provide a lift to economic growth this quarter. The trade gap contracted by a record 55.5% to $61.6 billion, the lowest level since September 2023. The goods trade deficit eased by a record 46.2% to $87.4 billion, the lowest level since October 2023. A rush to beat import duties helped to widen the trade deficit in the first quarter, which accounted for a large part of the 0.2% annualized rate of decline in gross domestic product last quarter. The contraction in the deficit, at face value, suggests that trade could significantly add to GDP this quarter, but much would depend on the state of inventories. 'The collapse in the trade gap, although unlikely to be sustained, points to a massive trade addition to GDP growth and, if the offset to the import swing is not measured in inventories, second-quarter measured GDP growth could be eye-popping, possibly in the area of 5%, but as meaningless as the first-quarter's decline in output,' said Conrad DeQuadros, senior economic advisor at Brean Capital. Imports decreased by a record 16.3% to $351.0 billion in April. Goods imports slumped by a record 19.9% to $277.9 billion, held down by a $33.0 billion decline in consumer goods, mostly pharmaceutical preparations from Ireland. Agencies
Al Etihad
9 hours ago
- Al Etihad
Apple under pressure to shine after AI stumble
8 June 2025 09:19 SAN FRANCISCO (AFP)Pressure is on Apple to show it hasn't lost its magic despite broken promises to ramp up iPhones with generative artificial intelligence (GenAI) as rivals race ahead with the will showcase plans for its coveted devices and the software powering them at its annual Worldwide Developers Conference (WWDC) kicking off Monday in Silicon event comes a year after the tech titan said a suite of AI features it dubbed Apple Intelligence was heading for iPhones, including an improvement of its much criticised Siri voice Apple delayed the rollout of the Siri upgrade, with hopes that it will be available in time for the next iPhone release, expected in the fall."Apple advertised a lot of features as if they were going to be available, and it just didn't happen," noted Emarketer senior analyst Gadjo Sevilla."I don't think there is going to be that much of a celebratory tone at WWDC," the analyst told AFP. "It could be more of a way for Apple to recover some credibility by showing where they're headed."Industry insiders will be watching to see whether Apple addresses the AI stumble or focuses on less splashy announcements, including a rumoured overhaul of its operating systems for its line of devices."The bottom line is Apple seemed to underestimate the AI shift, then over-promised features, and is now racing to catch up," Gene Munster and Brian Baker of Deepwater Asset Management wrote in a WWDC preview also include talk that Apple may add GenAI partnerships with Google or Perplexity to an OpenAI alliance announced a year its lineup with AI is only one of Apple's who build apps and tools to run on the company's products, may be keen for Apple to loosen its tight control of access to iPhones.A lawsuit by Fortnite maker Epic Games ended with Apple being ordered to allow outside payment systems to be used at the US App Store, but developers may want more, analysts have to the WWDC buildup is that the legendary designer behind the iPhone, Jony Ive, has joined with ChatGPT maker OpenAI to create a potential rival device for engaging with while unlikely to come up at WWDC, Apple has to deal with tariffs imposed by US President Donald Trump in his trade war with China, a key market for sales growth as well as the place where most iPhones are made. Trump has also threatened to hit Apple with tariffs if iPhone production wasn't moved to the US, which analysts say is impossible given the costs and capabilities.
Khaleej Times
9 hours ago
- Khaleej Times
US President Trump warns Elon Musk of 'serious consequences' if he funds Democrats
Donald Trump said on Saturday his relationship with his billionaire donor Elon Musk is over and warned there would be "serious consequences" if Musk funds US Democrats running against Republicans who vote for the president's sweeping tax and spending bill. In a telephone interview with NBC News, Trump declined to say what those consequences would be, and went on to add that he had not had discussions about whether to investigate Musk. Asked if he thought his relationship with the Tesla and SpaceX CEO was over, Trump said, "I would assume so, yeah." "No," Trump told NBC when asked if he had any desire to repair his relationship with Musk. "I have no intention of speaking to him," Trump said. However, Trump said he had not thought about terminating US government contracts with Musk's StarLink satellite internet or SpaceX rocket launch companies. Musk and Trump began exchanging insults this week, as Musk denounced Trump's bill as a "disgusting abomination." Musk's opposition to the measure complicated efforts to pass the legislation in Congress, where Republicans hold only slim majorities in the House of Representatives and Senate. The bill narrowly passed the House last month and is now before the Senate, where Trump's fellow Republicans are considering making changes. Nonpartisan analysts estimate the measure would add $2.4 trillion to the $36.2 trillion US debt over 10 years, which worries many lawmakers, including some Republicans who are fiscal hawks. Musk also declared it was time for a new political party in the United States "to represent the 80 per cent in the middle!" Trump said on Saturday he is confident the bill would get passed by the US July 4 Independence Day holiday. "In fact, yeah, people that were, were going to vote for it are now enthusiastically going to vote for it, and we expect it to pass," Trump told NBC. Republicans have strongly backed Trump's initiatives since he began his second term as president on January 20. While some Republican lawmakers have made comments to the news media expressing concern about some of Trump's choices, they have yet to vote down any of his policies or nominations. Deleted posts Musk has deleted some social media posts critical of Trump, including one that signalled support for impeaching the president, appearing to seek a de-escalation of their public feud, which exploded on Thursday. During his first term as president, the House, then controlled by Democrats, twice voted to impeach Trump but the Senate both times acquitted him. The White House and Musk did not immediately respond to requests for comment on Saturday on the deleted posts. People who have spoken to Musk said his anger has begun to recede and they thought he would want to repair his relationship with Trump. One of the X posts that Musk appeared to have deleted was a response to another user posting: "President vs Elon. Who wins? My money's on Elon. Trump should be impeached and (Vice President) JD Vance should replace him." Musk had written "yes."
