Nasdaq, S&P hit record levels as megacaps rise ahead of tech earnings
At 11:21 a.m. ET, the S&P 500 gained 34.97 points, or 0.56 per cent, to 6,331.90 and the Nasdaq Composite gained 147.24 points, or 0.71 per cent, to 21,042.87.
The Dow Jones Industrial Average rose 201.87 points, or 0.46 per cent, to 44,544.76, just 1.28 per cent shy of its all-time high.
Verizon gained 4.1 per cent after boosting its annual profit forecast. The stock also drove up the communications sector, which emerged as the top gainer among other sectors.
Most big-tech names moved higher, pushing the S&P's information technology sector up 0.6 per cent to hit an all-time high.
The spotlight was on Google-parent Alphabet and electric-vehicle maker Tesla, whose results this week will kick off the "Magnificent Seven" earnings parade, and could set the tone for Wall Street.
Shares of Alphabet rose 2.1 per cent, while Tesla dipped 0.2 per cent. Both stocks have lagged their peers so far this year, with Tesla down 18.5 per cent year to date and Alphabet slipping 0.2 per cent.
"It is going to be interesting to see the Tesla and Google reports," because those two are kind of "underachievers in the Mag 7 this year," said Mike Dickson, head of research at Horizon Investments.
"We're going to need these earnings reports to just really knock it out of the park if we want to see this little leg of the rally continue."
Despite U.S. President Donald Trump's August 1 tariff deadline, the S&P 500 and the Nasdaq reached new heights recently as investors believed that the economic fallout from tariffs might not be as dire as once feared.
Trump has threatened to slap 30 per cent tariffs on imports from Mexico and the EU, and sent letters to other trading partners, including Canada, Japan and Brazil, setting blanket tariff rates ranging from 20 per cent to 50 per cent.
Investors were expecting some progress in trade talks after U.S. Commerce Secretary Howard Lutnick on Sunday expressed confidence over striking a trade deal with the European Union.
However, EU diplomats said the 27-member bloc is exploring a broader set of possible counter-measures against the United States, as hopes for a breakthrough deal with Washington dwindled.
On the economic data front, investors will keep a close eye on jobless claims figures and the July business activity report, expected on Thursday.
They will also closely analyze Federal Reserve Chair Jerome Powell's remarks on Tuesday for any clues on the central bank's next move, especially after last week's mixed inflation signals.
Traders have largely ruled out a July rate cut, and are now pegging the odds at about 56 per cent for a September reduction, according to CME Group's FedWatch tool.
Advancing issues outnumbered decliners by a 3.02-to-1 ratio on the NYSE, and by a 2.58-to-1 ratio on the Nasdaq.
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8 hours ago
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The benchmark S&P 500 Index sank 1.6% in its largest daily drop in more than two months. Trump accused Erika McEntarfer, appointed by former President Joe Biden, of faking the jobs numbers. There is no evidence to back Trump's claims of data manipulation by the Bureau of Labor Statistics, the statistical agency that compiles the closely watched employment report as well as consumer and producer price data. A representative for the BLS did not respond to a request for comment. Friday began with BLS reporting the U.S. economy created only 73,000 jobs in July, but more stunning were net downward revisions showing 258,000 fewer jobs had been created in May and June than previously reported. "We need accurate Jobs Numbers. I have directed my Team to fire this Biden Political Appointee, IMMEDIATELY. She will be replaced with someone much more competent and qualified," Trump said in a post on Truth Social. Top stories Swipe. Select. Stay informed. Singapore Opening of Woodlands Health has eased load on KTPH, sets standard for future hospitals: Ong Ye Kung Singapore New vehicular bridge connecting Punggol Central and Seletar Link to open on Aug 3 Singapore New S'pore jobs portal launched for North West District residents looking for work near home Singapore HSA investigating teen allegedly vaping on MRT train Asia KTM plans new passenger rail service in Johor Bahru to manage higher footfall expected from RTS Singapore Tengah facility with over 40 animal shelters, businesses hit by ticks Business Property 'decoupling' illegal if done solely to avoid taxes: High Court Singapore 60 years of building Singapore DATA CONCERNS A Trump administration official who requested anonymity said that while all economic data is noisy, the White House has been dissatisfied with how large the revisions have been in the recent data and issues with lower survey responses. The problem started during COVID and has not been addressed in the years since. "There are these underlying problems that have been festering here for years now that have not been rectified," the person said. "The markets and companies and the government need accurate data, and like, we just weren't getting that," the official said. The BLS has already reduced the sample collection for consumer price data as well as the producer price report, citing resource constraints. The government surveys about 121,000 businesses and government agencies, representing approximately 631,000 individual worksites for the employment report. The response rate has declined from 80.3% in October 2020 to about 67.1% in July, BLS data shows. A Reuters poll last month found 89 of 100 top policy experts had at least some worries about the quality of U.S. economic data, with most also concerned that authorities are not addressing the issue urgently enough. In addition to the concerns over job market data, headcount reductions at BLS have resulted in it scaling back the scope of data collection for the Consumer Price Index, one of the most important gauges of U.S. inflation, watched by investors and policymakers worldwide. Trump's move fed into concerns that politics may influence data collection and publication. "Politicizing economic statistics is a self-defeating act," said Michael Madowitz, principal economist at the Roosevelt Institute's Roosevelt Forward. "Credibility is far easier to lose than rebuild, and the credibility of America's economic data is the foundation on which we've built the strongest economy in the world. Blinding the public about the state of the economy has a long track record, and it never ends well." FED CHANGE SOONER THAN EXPECTED Meanwhile, Kugler's surprise decision to leave the Fed at the end of next week presents Trump an earlier-than-expected opportunity to install a potential successor to Fed Chair Jerome Powell on the central bank's Board of Governors. Trump has threatened to fire Powell repeatedly because the Fed chief has overseen a policymaking body that has not cut interest rates as Trump has demanded. Powell's term expires next May, although he could remain on the Fed board until January 31, 2028, if he chooses. Trump will now get to select a Fed governor to replace Kugler and finish out her term, which expires on January 31, 2026. A governor filling an unexpired term may then be reappointed to a full 14-year term. Some speculation has centered on the idea Trump might pick a potential future chair to fill that slot as a holding place. Leading candidates for the next Fed chair include Trump economic adviser Kevin Hassett, Treasury Secretary Scott Bessent, former Fed Governor Kevin Warsh and Fed Governor Chris Waller, a Trump appointee who this week dissented with the central bank's decision to keep rates on hold, saying he preferred to start lowering them now. Trump, as he was leaving the White House to spend the weekend at his Bedminster, New Jersey, estate, said he was happy to have the open slot to fill. "I would not read any political motivation into what [Kugler is] doing, although the consequence of what she's doing is she's calling Trump's bluff," said Derek Tang, an analyst at LH Meyer, a research firm. "She's putting the ball in his court and saying, look, you're putting so much pressure on the Fed, and you want some control over nominees, well, here's a slot." REUTERS
Straits Times
10 hours ago
- Straits Times
Trump fires US labor official over data and gets earlier than expected chance to reshape Fed
Signage is seen at the United States Department of Labor headquarters in Washington, D.C., U.S., August 29, 2020. REUTERS/Andrew Kelly WASHINGTON/NEW YORK - President Donald Trump on Friday fired a top Labor Department official on the heels of a market-shocking weak scorecard of the U.S. job market, accusing her without evidence of manipulating the figures and adding to already growing concerns about the quality of economic data published by the federal government. In a second surprise economic policy development, the door for Trump to make an imprint on a Federal Reserve with which he clashes almost daily for not lowering interest rates opened much earlier than anticipated when Fed Governor Adriana Kugler unexpectedly announced her resignation on Friday afternoon. The two developments further rattled a stock market already reeling from his latest barrage of tariff announcements and the weak jobs data. The benchmark S&P 500 Index sank 1.6% in its largest daily drop in more than two months. Trump accused Erika McEntarfer, appointed by former President Joe Biden, of faking the jobs numbers. There is no evidence to back Trump's claims of data manipulation by the Bureau of Labor Statistics, the statistical agency that compiles the closely watched employment report as well as consumer and producer price data. A representative for the BLS did not respond to a request for comment. Friday began with BLS reporting the U.S. economy created only 73,000 jobs in July, but more stunning were net downward revisions showing 258,000 fewer jobs had been created in May and June than previously reported. "We need accurate Jobs Numbers. I have directed my Team to fire this Biden Political Appointee, IMMEDIATELY. She will be replaced with someone much more competent and qualified," Trump said in a post on Truth Social. Top stories Swipe. Select. Stay informed. 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The problem started during COVID and has not been addressed in the years since. "There are these underlying problems that have been festering here for years now that have not been rectified," the person said. "The markets and companies and the government need accurate data, and like, we just weren't getting that," the official said. The BLS has already reduced the sample collection for consumer price data as well as the producer price report, citing resource constraints. The government surveys about 121,000 businesses and government agencies, representing approximately 631,000 individual worksites for the employment report. The response rate has declined from 80.3% in October 2020 to about 67.1% in July, BLS data shows. A Reuters poll last month found 89 of 100 top policy experts had at least some worries about the quality of U.S. economic data, with most also concerned that authorities are not addressing the issue urgently enough. In addition to the concerns over job market data, headcount reductions at BLS have resulted in it scaling back the scope of data collection for the Consumer Price Index, one of the most important gauges of U.S. inflation, watched by investors and policymakers worldwide. Trump's move fed into concerns that politics may influence data collection and publication. "Politicizing economic statistics is a self-defeating act," said Michael Madowitz, principal economist at the Roosevelt Institute's Roosevelt Forward. "Credibility is far easier to lose than rebuild, and the credibility of America's economic data is the foundation on which we've built the strongest economy in the world. Blinding the public about the state of the economy has a long track record, and it never ends well." FED CHANGE SOONER THAN EXPECTED Meanwhile, Kugler's surprise decision to leave the Fed at the end of next week presents Trump an earlier-than-expected opportunity to install a potential successor to Fed Chair Jerome Powell on the central bank's Board of Governors. Trump has threatened to fire Powell repeatedly because the Fed chief has overseen a policymaking body that has not cut interest rates as Trump has demanded. Powell's term expires next May, although he could remain on the Fed board until January 31, 2028, if he chooses. Trump will now get to select a Fed governor to replace Kugler and finish out her term, which expires on January 31, 2026. A governor filling an unexpired term may then be reappointed to a full 14-year term. Some speculation has centered on the idea Trump might pick a potential future chair to fill that slot as a holding place. Leading candidates for the next Fed chair include Trump economic adviser Kevin Hassett, Treasury Secretary Scott Bessent, former Fed Governor Kevin Warsh and Fed Governor Chris Waller, a Trump appointee who this week dissented with the central bank's decision to keep rates on hold, saying he preferred to start lowering them now. Trump, as he was leaving the White House to spend the weekend at his Bedminster, New Jersey, estate, said he was happy to have the open slot to fill. "I would not read any political motivation into what [Kugler is] doing, although the consequence of what she's doing is she's calling Trump's bluff," said Derek Tang, an analyst at LH Meyer, a research firm. "She's putting the ball in his court and saying, look, you're putting so much pressure on the Fed, and you want some control over nominees, well, here's a slot." REUTERS
Business Times
11 hours ago
- Business Times
World economies reel from Trump's tariffs punch
[WASHINGTON] Global markets reeled on Friday (Aug 1) after US President Donald Trump's tariffs barrage against nearly all US trading partners as governments looked down the barrel of a seven-day deadline before higher duties take effect. Trump announced late Thursday that dozens of economies, including the European Union, will face new tariff rates of between 10 and 41 per cent. However, implementation will be on Aug 7 rather than on Friday as previously announced, the White House said. This gives governments a window to rush to strike deals with Washington, setting more favourable conditions. Neighbouring Canada, one of the biggest US trade partners, was hit with 35 per cent levies, up from 25 per cent, effective Friday, but with wide-ranging, current exemptions remaining in place. The tariffs are a demonstration of raw economic power that Trump sees putting US exporters in a stronger position, while encouraging domestic manufacturing by keeping out foreign imports. But the muscular approach has raised fears of inflation and other economic fallout in the world's biggest economy. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Stock markets in Hong Kong, London and New York slumped as they digested the turmoil, while weak US employment data added to worries. Trump's actions come as debate rages over how best to steer the US economy, with the US Federal Reserve this week deciding to keep interest rates unchanged, despite massive political pressure from the White House to cut. Data Friday showed US job growth missing expectations for July, while unemployment ticked up to 4.2 per cent from 4.1 per cent. On Wall Street, the S&P 500 dropped 1.6 per cent, while the Nasdaq tumbled 2.2 per cent. Political goals Trump raised duties on around 70 economies, from a current 10 per cent level imposed in April when he unleashed 'reciprocal' tariffs, citing unfair trade practices. The new, steeper levels listed in an executive order vary by trading partner. Any goods 'transshipped' through other jurisdictions to avoid US duties would be hit with an additional 40 per cent tariff, the order said. But Trump's duties also have a distinctly political flavour, with the president using separate tariffs to pressure Brazil to drop the trial of his far-right ally, former president Jair Bolsonaro. He also warned of trade consequences for Canada, which faces a different set of duties, after Prime Minister Mark Carney announced plans to recognise a Palestinian state at the UN General Assembly in September. In targeting Canada, the White House cited its failure to 'cooperate in curbing the ongoing flood of fentanyl and other illicit drugs', although Canada is not a major source of illegal narcotics. By contrast, Trump gave more time to Mexico, delaying for 90 days a threat to increase its tariffs from 25 to 30 per cent. But exemptions remain for a wide range of Canadian and Mexican goods entering the United States under an existing North American trade pact. Carney said that his government was 'disappointed' with the latest rates hike but noted that with exclusions, the US average tariff on Canadian goods remains one of the lowest among US trading partners. 'Tears up' rule book With questions hanging over the effectiveness of bilateral trade deals struck, including with the EU and Japan, the outcome of Trump's overall plan remains uncertain. 'No doubt about it, the executive order and related agreements concluded over the past few months tears up the trade rule book that has governed international trade since World War II,' said Wendy Cutler, senior vice president of the Asia Society Policy Institute. On Friday, Trump said that he would consider distributing a tariff 'dividend' to Americans. Notably excluded from Friday's drama was China, which is in the midst of negotiations with the United States. Washington and Beijing at one point brought tit-for-tat tariffs to triple-digit levels, but have agreed to temporarily lower these duties and are working to extend their truce. Those who managed to strike deals with Washington to avert steeper threatened levies included Vietnam, Japan, Indonesia, the Philippines, South Korea and the European Union. Among other tariff levels adjusted in Trump's latest order, Switzerland now faces a higher 39 per cent duty. AFP
