US stocks steady as investors await Fed signals, retail results
Wall Street's main indexes were subdued on Monday, in a quiet start to a week packed with corporate earnings reports from major retailers and the Federal Reserve's annual symposium in Jackson Hole.
Investors also remained wary ahead of a meeting between U.S. President Donald Trump and Ukraine's Volodymyr Zelenskiy on Kyiv's conflict with Moscow, which comes days after Trump's summit with Russia's Vladimir Putin that yielded no concrete outcome.
Wall Street's main indexes rallied over the past two weeks, with the blue-chip Dow , opens new tab hitting an intra-day record high on Friday, aided by interest rate cut expectations and a better-than-expected earnings season despite an uncertain trade environment.
Investors will closely monitor reports from Walmart , opens new tab, Home Depot , opens new tab and Target , opens new tab among others, which are expected this week, to determine how trade uncertainty and inflation expectations have affected U.S. consumers.
Data on Friday showed that while retail sales were increasing broadly as anticipated, consumer sentiment overall had taken a hit from mounting inflation fears. 'In aggregate, you're going to see that the consumer is still spending despite saying that they're depressed,' said Thomas Hayes, chairman at Great Hill Capital.
'Retail sales have continued to hold strong and we're going to see it reflected in the (retailers') earnings.'
At 11:43 a.m. ET, the Dow Jones Industrial Average , opens new tab rose 2.47 points, or 0.01%, to 44,948.59, the S&P 500 , opens new tab lost 5.64 points, or 0.09%, to 6,444.16 and the Nasdaq Composite , opens new tab lost 40.51 points, or 0.18%, to 21,582.97.
Six of the 11 S&P 500 sectors edged lower, with communication services , opens new tab in the lead with a 0.9% fall, weighed by Facebook parent Meta's , opens new tab 2.7% slide.
Investors continue to price in a 25-basis-point cut from the Federal Reserve next month, although they have lowered their expectations for another rate cut this year, according to data compiled by LSEG.Recent data have also suggested that while U.S. tariffs have not filtered into headline consumer prices yet, weakness in the jobs market could nudge the central bank to take a more dovish stance.
Markets hope that the Fed's Jackson Hole, Wyoming conference between August 21 and 23, where Chair Jerome Powell is expected to speak, could offer more clarity on the economic outlook and the central bank's policy framework.
On the trade front, the Trump administration widened the reach of its 50% tariffs on steel and aluminum imports by adding hundreds of derivative products to the list of goods subject to the levies.
Dayforce , opens new tab jumped 26.9% after a report said PE firm Thoma Bravo is in talks to acquire the HR management software firm.
Solar stocks such as SunRun , opens new tab rose 6.7% and First Solar , opens new tab gained 9.2% after the U.S. Treasury Department unveiled new federal tax subsidy rules for solar and wind projects. Advancing issues outnumbered decliners by a 1.09-to-1 ratio on the NYSE and by a 1.19-to-1 ratio on the Nasdaq.
The S&P 500 posted eight new 52-week highs and two new lows, while the Nasdaq Composite recorded 65 new highs and 56 new lows.
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Al Jazeera
5 hours ago
- Al Jazeera
Why is the US sparing China, but not India, for importing Russian oil?
United States President Donald Trump has threatened to slap new sanctions on Russia and secondary sanctions on countries that buy Moscow's crude in efforts to end the Russia-Ukraine war. While Trump imposed an additional 25 percent tariff earlier this month – to a total of 50 percent – on India's goods, citing its continued imports of Russian oil, he has not instigated similar punitive actions against China, the largest buyer of Russian energy. So, why has the Trump administration mounted pressure on India to stop purchasing Russian oil while taking little action against China? Who is buying Russia oil, and how does Trump want to prevent that? As the largest purchaser of Russian oil, China imported a record 109 million tonnes of this product last year, representing nearly 20 percent of its total energy imports, Chinese customs data showed. India, by contrast, imported 88 million tonnes of Russian oil in 2024. As such, China has arguably been Russia's key economic lifeline, leading to accusations that Beijing is indirectly helping Moscow in its war on Ukraine, now in its fourth year. It is understood that lawmakers from both main US political parties are pushing for a bill – the Sanctioning Russia Act of 2025 – that would target any country that buys Russian oil and natural gas. The bill would give Trump the authority to impose 500 percent tariffs against nations that are perceived to be helping Russia. US senators are reportedly waiting on Trump's OK to move the bill forward. What reasons has Trump cited for not imposing new tariffs on China? Asked by Fox News on August 15 if he was considering secondary sanctions on Beijing after he and Russian President Vladimir Putin failed to agree on a Russia-Ukraine ceasefire in Alaska last week, Trump said, 'Well, because of what happened today, I think I don't have to think about that.' 'Now, I may have to think about it in two weeks or three weeks or something, but we don't have to think about that right now,' he said. Observers suspect Trump is buying time to allow negotiations on a broad trade deal that would include rare earth minerals. Rare earths are a group of 17 elements essential to numerous manufacturing industries, from auto parts to clean energy and military technology. China has long dominated the mining and processing of rare earth minerals. Because numerous US industries are heavily reliant on Chinese minerals, they remain a central issue in ongoing trade talks. Trump has other reasons for giving China an easier ride than India. In particular, he's keen to avoid a tariff spike just as US retailers stock up on inventories of Chinese goods ahead of December's Christmas holiday season. For his part, Trump has taken steps to reduce trade flashpoints in recent weeks. Earlier this month, the US eased some of its export restrictions on advanced semiconductors – a key demand from China. On August 11, Trump permitted US company Nvidia to sell advanced chips to China – even if the tech giant would have to pay 15 percent of its China sales to the federal government. Trump had previously barred the deal. Speaking to CNBC news on Tuesday, US Treasury Secretary Scott Bessent defended Washington's decision not to impose secondary sanctions against China saying, Beijing purchased 13 percent of Russian oil before the Ukraine war, which has now increased to 16 percent. 'So China has a diversified input of their oil,' he said. He added that China had not engaged in the kind of 'arbitrage' done by India. But Bessent accused India of 'profiteering'. He pointed out that before the Ukraine war, India's import of Russian oil was less than 1 percent. But 'now, I believe, it's up to 42 percent,' he said. 'This is what I would call the Indian arbitrage – buying cheap Russian oil, reselling it as product,' he told CNBC. 'They've made $16bn in excess profits – some of the richest families in India.' On Monday, White House trade adviser Peter Navarro became the second senior Trump administration official to accuse India of financing Russia's war in Ukraine. Earlier this month, Stephen Miller, deputy chief of staff at the White House, said that New Delhi's purchase of Russia crude was 'not acceptable'. What have other officials said? On August 12, US Vice President JD Vance declined to say whether Trump would move against Beijing as he did with New Delhi the previous week, when Washington announced an extra 25 percent tariff on India's imports over its continued purchase of Russian oil. 'The president said he's thinking about it, but he hasn't made any firm decisions … the China issue's a little bit more complicated because our relationship with China, it just, it affects a lot of other things that have nothing to do with the Russian situation,' Vance said. Earlier this week, US Secretary of State Marco Rubio warned that energy prices could rise if the US imposes secondary sanctions on China for refining Russian oil. In an interview with Fox News on Monday, Rubio said, 'If you put secondary sanctions on a country – let's say you were to go after the oil sales of Russian oil to China. Well, China just refines that oil. That oil is then sold into the global marketplace, and anyone who's buying that oil would be paying more for it.' Meanwhile, Beijing's embassy in Washington said China's trade with Russia falls within the scope of international law. 'The international community, including China, has conducted normal cooperation with Russia within the framework of international law,' said Liu Pengyu, the embassy's spokesman, on July 6. How would heightened tariffs impact the US and Chinese economies? A ceasefire deal in Ukraine, with the resulting reduction of sanctions on Russia, would bring greater stability to the international system and a boon for China's economy, not least after the last subdued economic data in July. Last month, China's economy slowed as factory activity, investment and retail sales fell from June, suggesting that spillovers from Trump's tariffs are casting a pall over the world's number-two economy. Elsewhere, China's youth unemployment rate rose to its highest level in 11 months in July, as the urban jobless rate for the 16-24 age group, excluding students, rose to 17.8 percent – up from 14.5 percent in June. Alicia Garcia Herrero, chief Asia Pacific economist at Natixis in Hong Kong, told Al Jazeera that 'Cracks are starting to show [in the Chinese economy] and the overall picture is not great.' Still, she said that 'Chinese banks and firms have been preparing for the possibility of secondary sanctions for a long time already. They already started worrying about this under the [Joe] Biden administration.' In recent years, Beijing has stepped up its efforts to diversify trade routes and build greater numbers of strategic products at home, making China's economy 'harder to strangle through elevated or secondary sanctions', said Garcia Herrero. 'Clearly,' she said, 'given the high level of goods imports from China to the US, higher tariffs would also raise inflation for American consumers.' Last year, the US trade deficit with China was $295.4bn, marking a 5.8 percent rise from 2023. What is the current state of US-China trade? On August 12, the US and China extended a pre-existing tariff pause – and avoided an all-out trade war – for 90 days. With the extension, the imposition of higher US tariffs on China was suspended until November 10, with all other elements of the truce remaining in place. The two sides agreed to their first tariff pause on May 11. In April, China was slapped with a tariff of 145 percent while Beijing slapped a reciprocal tariff of 125 percent on the US – rates that amounted to a virtual trade embargo between the countries. High tariffs prompted the US trade deficit with China to fall to its narrowest level since 2004 in June, according to US Census Bureau data. The US trade gap with China fell by $22.2bn from March to August. That amounts to a 70 percent drop from one year earlier. But the tariff truce agreed to in May in Geneva, Switzerland, lowered the temperature by temporarily slashing US tariffs on Chinese imports to 30 percent, while Chinese levies on US exports fell to 10 percent. Beijing also agreed to resume some rare earth exports. 'I think there will be a [trade] deal of some sort soon,' Garcia Herrero said. 'Nothing dramatic, as the levels of trust on both sides are low. But the US and China both need some positive news, or they face hitting economic walls.'
Al Jazeera
6 hours ago
- Al Jazeera
How will Trump's semiconductor tariffs affect the global chip industry?
United States President Donald Trump has threatened to impose tariffs of up to 300 percent on semiconductor imports, with exemptions for foreign companies that commit to manufacturing in the US. Trump has cast the proposed tariff as a way to drive investment to the US, but experts say it could also disrupt global supply chains and even penalise companies already making chips in the US. What are the details of Trump's plan? Few details have been released since Trump announced plans for a 100 percent tariff at a White House event on August 7. The US president said exemptions would be given to companies that build research or manufacturing facilities in the US, but tariffs could be applied retroactively if they failed to follow through on their planned investments. 'If, for some reason, you say you're building, and you don't build, then we go back, and we add it up, it accumulates, and we charge you at a later date, you have to pay, and that's a guarantee,' Trump told reporters. On Friday, Trump told reporters on board Air Force One that more details would be announced soon and that the tariff could be much higher than previously suggested. 'I'll be setting tariffs next week and the week after, on steel and on, I would say chips – chips and semiconductors, we'll be setting sometime next week, week after,' Trump said en route to Alaska to meet with Russian President Vladimir Putin. 'I'm going to have a rate that is going to be 200 percent, 300 percent,' he added. Why does Trump want to impose tariffs on chip imports? Trump wants to impose a tariff on chips for several reasons, but the main one is to re-shore investment and manufacturing to the US, said G Dan Hutcheson, the vice chair of Canada's TechInsights. 'The primary goal is to reverse the cost disadvantage of manufacturing in the US and turn it into an advantage. It's mainly focused on companies that are not investing in the US,' Hutcheson told Al Jazeera. 'Exclusions are negotiable for entities that align with his goal of bringing manufacturing back to the US.' More broadly, the tariff is also intended to address the US dependence on imported semiconductors and buttress Washington's position in its ongoing rivalry with China, another chip-making powerhouse. Both issues are bipartisan concerns in the US. The Trump administration earlier this year launched a Section 301 investigation into alleged unfair trade practices in China's semiconductor industry, and a Section 232 investigation into the national security implications of US reliance on chip imports and finished products that use foreign chips. Who will be impacted by the tariff? Foreign tech giants that have already invested in the US, including the Taiwan Semiconductor Manufacturing Company (TSMC) and South Korea's Samsung, would likely not be affected by the tariff. It is less clear how the measure could affect other companies, including chip makers in China, where companies face barriers to US investment from both US and Chinese regulators. Yongwook Ryu, an assistant professor at the Lee Kuan Yew School of Public Policy in Singapore, said the tariff could be used as leverage by the US as it negotiates the rate of its so-called 'reciprocal tariffs' on China. The US has imposed blanket tariffs of 10-40 percent on most trade partners since August 7, but negotiators are still hammering out a comprehensive trade deal with Beijing. 'My view is that while the reciprocal tariffs are generally aimed more at addressing the US trade deficit problem and re-shoring manufacturing back to the US, product-specific or sectoral tariffs [like semiconductors] are aimed at serving the strategic goal of strengthening US technological hegemony and containing China,' Ryu told Al Jazeera. What is the value of US chip imports each year? The US imported about $40bn in chips in 2024, according to a report by the American Enterprise Institute, citing United Nations trade data. Imports mainly came from Taiwan, Malaysia, Israel, South Korea, Ireland, Vietnam, Costa Rica, Mexico and China, but experts say this data does not capture the full picture of chip flows in and out of the US. Chips can cross borders multiple times as they are manufactured, packaged, or added to finished goods. Chris Miller, the author of Chip War: The Fight for the World's Most Critical Technology, estimates that another $50bn worth of chips entered the US in 2024 via products like smartphones, auto parts and home appliances from countries like China and Vietnam. Miller also estimates that a 'substantial portion' of US chip imports are manufactured in the US before being sent overseas for packaging – a labour-intensive process – and then re-imported. 'Many of the chips imported from key trading partners like Mexico, Malaysia and Costa Rica are likely actually manufactured by US firms like Texas Instruments and Intel, which have manufacturing in the US but often have their test and assembly facilities abroad,' Miller told Al Jazeera. Why is the tariff a concern for the global chip industry? Trump's tariff plans have injected further uncertainty into an industry already grappling with his administration's sweeping efforts to reorder global trade. 'It's unclear whether the US government has the capacity to effectively enforce this and… there's not really any guidance in terms of what these tariffs are actually going to look like,' Nick Marro, the lead analyst for global trade at the Economist Intelligence Unit, told Al Jazeera. The White House has yet to provide details on whether the tariff will apply to chips originally made in the US and chips contained in finished products. If the latter were included in the tariff plans, the fallout would extend to industries like electronics, home appliances, automobiles and auto parts. Miller said that it would be consumers in the US and elsewhere who would be among those most affected by the tariff. 'Initially, it appears that most costs would be paid by companies via lower profit margins, though in the long run, consumers will pay the majority of the cost,' he said.
Al Jazeera
6 hours ago
- Al Jazeera
Trump's White House takes to TikTok as deadline looms to ban platform
The White House has launched an official TikTok account, even as the future of the Chinese-owned social media app in the United States remains uncertain due to legislation passed by the US Congress last year. The official White House account's first post on Tuesday was a 27-second video featuring a voiceover from President Donald Trump, saying: 'Every day I wake up determined to deliver a better life for the People all across this nation. I am your voice.' The account's description read: 'Welcome to the Golden Age of America'. TikTok, which remains owned by Chinese technology company ByteDance, is popular among young people, and has an estimated 170 million users in the US. Trump has so far delayed the implementation of a 2024 law that ordered TikTok to either to sell to non-Chinese buyers or be banned in the US, with three 90-day extensions. The US House of Representatives voted 352 to 65 in favour of the 'sell or ban' bill in March 2024, with widespread support from both Republicans and Democrats. The latest extension delaying the ban is due to expire in early September. 'My Administration has been working very hard on a Deal to SAVE TIKTOK, and we have made tremendous progress,' Trump posted on the Truth Social network, which he owns, in April. Few representatives questioned the bill to ban TikTok at the time it was passed, although then-Democratic representative Barbara Lee asked why only one company was being singled out in an attempt to address problems that relate to social media companies more broadly. 'Rather than target one company in a rushed and secretive process, Congress should pass comprehensive data privacy protections and do a better job of informing the public of the threats these companies may pose to national security,' Lee had posted on the social media platform X. Although the vast majority of both Democratic and Republican representatives supported the 'sell or ban' bill, many members of both parties have used the TikTok platform for campaigning and official communications. Both Democratic nominee Kamala Harris and Republican nominee Trump used the app to campaign in the 2024 Presidential election. On Tuesday, the US state of Minnesota joined a wave of states suing TikTok, alleging the social media giant preys on young people with addictive algorithms that trap them into becoming compulsive consumers of its short videos. Minnesota is also among dozens of US states that have sued Meta Platforms for allegedly building features into Instagram and Facebook that addict people. The messaging service Snapchat and the gaming platform Roblox are also facing lawsuits by some other states alleging harm to children.
