Stock markets could rally Wednesday amid optimism for future rate cuts
Futures for the S&P 500 and Nasdaq each ticked up 0.2 per cent, while futures for the Dow Jones Industrial Average rose 0.3 per cent. The S&P 500 and Nasdaq both closed at record highs on Tuesday.
TSX futures on Bay Street in Toronto are up nearly a quarter per cent ahead of the open, and just off an all-time high set earlier in August.
The rally in markets, which is partly being driven by relief over an extended truce in President Donald Trump's trade war with China, is being powered by new optimism that borrowing costs in the U.S. will fall.
Lower rates would give a boost to investment prices and to the economy by making it cheaper for U.S. households and businesses to borrow to buy houses, cars or equipment. President Donald Trump has angrily been calling for cuts to help the economy, often insulting the Fed's chair personally while doing so.
Story continues below advertisement
The Fed has hesitated, worried that Trump's tariffs could trigger another round of elevated inflation.
The Fed will get one more report on inflation and another on the U.S. job market before its next meeting, which ends Sept. 17. The most recent jobs report was a stunner, coming in much weaker than economists expected.
Get breaking National news
For news impacting Canada and around the world, sign up for breaking news alerts delivered directly to you when they happen. Sign up for breaking National newsletter Sign Up
By providing your email address, you have read and agree to Global News' Terms and Conditions and Privacy Policy
Critics say the broad U.S. stock market is looking expensive after its surge from a bottom in April. That's putting pressure on companies to deliver continued growth in profit.
0:36
Trump weighing lawsuit against Fed chair Powell over renovations: White House
Gildan Activewear announced Wednesday that it was buying HanesBrands for $2.2 billion in a deal that will give HanesBrands shareholders close to 20 per cent of the combined company. The deal, which was widely reported Tuesday ahead of the official announcement, will give Gildan access to brands including Hanes and Maidenform.
Story continues below advertisement
HanesBrands shares fell more than nine per cent before the bell after climbing 28 per cent on Tuesday when rumors of the deal surfaced.
Cava slid 24 per cent in off-hours trading after the Mediterranean restaurant chain posted weaker-than-forecast same store sales in the second quarter and cut some of its full-year guidance. Company executives pinned some of the lag in same store sales on the 'honeymoon effect,' when stores fail to sustain the huge demand they saw upon opening.
In Asia, Tokyo's benchmark Nikkei 225 added to its record set a day earlier, finishing 1.3 per cent higher at 43,274.67.
'Asia woke up in full risk-on mode, riding the coattails of a U.S. session that looked like someone hit the 'infinite bid' button after CPI didn't blow the inflation doors off,' Stephen Innes of SPI Asset Management said in a commentary.
Hong Kong's Hang Seng surged 2.6 per cent to 25,613.67, while the Shanghai Composite index added 0.5 per cent to 3,683.46.
In Japan, relief over the Trump administration's confirmation that its exports will face a flat 15 per cent U.S. import duty has driven strong buying of computer chip-related companies and other exporters.
Elsewhere in Asia, South Korea's Kospi advanced 1.1 per cent to 3,224.37. In Australia, the S&P/ASX 200 shed 0.6 per cent to 8,827.10.
Taiwan's Taiex was up 0.9 per cent and the Sensex in India gained 0.5 per cent. In Bangkok, the SET climbed one per cent after the Bank of Thailand cut its key interest rate by 0.25 percentage points to 1.5 per cent.
Story continues below advertisement
In Europe at midday, Germany's DAX rose 0.9 per cent and the CAC 40 in Paris picked up 0.6 per cent. Britain's FTSE 100 edged 0.1 per cent higher.
In energy trading, U.S. benchmark crude oil gave back 52 cents to $62.65 per barrel. Brent crude, the international standard, fell 44 cents to $65.68 per barrel.
The U.S. dollar dipped to 147.51 Japanese yen from 147.84 yen. The euro climbed to $1.1713 from $1.1677.
– With files from Global News' Ari Rabinovitch
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Winnipeg Free Press
4 minutes ago
- Winnipeg Free Press
Brazil's Lula announces $5.5 billion in credits for exporters hit by US tariffs
SAO PAULO (AP) — The Brazilian government on Wednesday unveiled a plan to support local exporters affected by a 50% tariff imposed by U.S. President Donald Trump on several products from the South American nation. Dubbed 'Sovereign Brazil,' the plan provides for a credit lifeline of 30 billion reais ($5.5 billion), among other measures. Brazil's President Luiz Inácio Lula da Silva described the plan, which includes a bill to be sent to Congress, as a first step to help local exporters. Congressional leaders attended Wednesday's ceremony, a first in months, in a sign of growing political support for the leftist leader in response to Trump's tariffs. Other measures announced by the Brazilian government include postponing tax charges for companies affected by U.S. tariffs, providing 5 billion reais ($930,000) in tax credits to small and medium-sized companies until the end of 2026 and expanding access to insurance against cancelled orders. The plan also incentivizes public purchases of items that could not be exported to the U.S. 'We cannot be scared, nervous and anxious when there is a crisis. A crisis is for us to create new things,' Lula said. 'In this case, what is unpleasant is that the reasons given to impose sanctions against Brazil do not exist.' Trump has directly tied the 50% tariff on many imported Brazilian goods to the judicial situation of his embattled ally, former President Jair Bolsonaro, who is currently under house arrest. Monday Mornings The latest local business news and a lookahead to the coming week. ___ Follow AP's coverage of Latin America and the Caribbean at
CBC
5 minutes ago
- CBC
BoC officials considered whether interest rate already low enough to weather tariffs
Newly released documents show some members of the Bank of Canada were wondering last month whether the central bank's benchmark interest rate is already low enough to support the Canadian economy through U.S. tariffs. The Bank of Canada on Wednesday released the summary of deliberations from the meetings leading up to its decision on July 30 to hold the policy rate steady at 2.75 per cent. Those minutes show the central bank's governing council was fixed on how U.S. tariffs and the global trade "rewiring" were affecting inflation and the wider Canadian economy. The central bank's decision arrived just a couple days before U.S. President Donald Trump ratcheted base tariffs on Canada up to 35 per cent, while maintaining an exemption for goods compliant with CUSMA. Despite the ongoing uncertainty, monetary policymakers noted there were some signs of economic resilience heading into the rate decision. Rate cuts 'sufficient' to support economy The deliberations show some members wondered if the Bank of Canada had already provided "sufficient support" to guide the economy through its tariff transition. The central bank cut its policy rate seven consecutive times from June 2024 to March of this year in a bid to boost the economy as inflation showed signs of coming back under control. Economists say much of the impact from a monetary policy decision tends to take effect a year or more after the move, so many of those rate cuts are just now starting to stimulate the economy. WATCH | Bank of Canada held rates again in July: Bank of Canada 'ready to respond to new information,' Macklem says after holding rate 14 days ago Bank of Canada governor Tiff Macklem, when asked Wednesday if he sees the need for a rate cut this year, declined to forecast — but stressed that the bank is always watching for new information, especially around the Canada-U.S. trade situation. In that vein, the Bank of Canada governing council wondered whether cutting rates now, only for the economy to recover on its own, would only end up fuelling inflation down the road. "Given the lagged effects of monetary policy, there was a risk that further easing might take effect only as demand was recovering, which could add to price pressures," the summary read. Some forecasters, including RBC, have no further interest rate cuts in their base-case outlooks. Others on the Bank of Canada's governing council felt that signs of slack emerging in the economy could warrant additional rate cuts, particularly if the labour market started showing more weakness. If incoming data showed inflation wasn't straying too far from the central bank's target of two per cent, there could be a need for a lower policy rate, those members argued in the deliberations. No sharp rise in inflation with U.S. tariffs Alongside the rate decision, the Bank of Canada issued three scenarios for how the U.S. tariff situation could evolve: the status quo persists; there's a de-escalation in trade restrictions; and tariffs ramp up. The governing council noted that none of those scenarios showed a "sharp rise in inflation." Monetary policymakers said in deliberations that the impact of tariffs on consumer prices "appeared to be modest so far," but those effects were only just starting to show up in the data. "Members judged the risks to inflation to be elevated given evident pressures on underlying inflation and the uncertainty around the impacts that tariffs and trade disruptions could have on Canada's economy over time," the summary read. The Bank of Canada will get a fresh look at inflation figures for July and August ahead of its Sept. 17 interest rate decision.
Canada News.Net
25 minutes ago
- Canada News.Net
US tariffs pressure tactics to get India to sign on dotted line in trade talks, we have not caved in: Vikas Swarup
New Delhi [India], August 13 (ANI): There are three reasons US President Donald Trump has imposed 50 per cent tariffs on Indian goods including his 'being miffed that India has not acknowledged his role' in cessation of hostilities with Pakistan following Operation Sindoor, former diplomat Vikas Swarup has said, noting that if there is positive outcome of Alaska talks, Russia sanctions will be off the table. In an interview with ANI, Vikas Swarup, who has been a former High Commissioner to Canada and is a renowned author, said that India has not caved in to the US pressure in trade talks to provide more access to the country's agriculture and dairy sectors. He said US is exerting pressure tactics to get India to agree to its maximalist demands. President Trump announced 25 per cent tariffs on Indian goods plus an unspecified penalty in July, even as there were hopes of an interim India-US trade deal that would have otherwise helped avoid elevated tariffs. A few days later, he imposed another 25 per cent tariff, taking the total to 50 per cent, over India's imports of Russian oil. 'We have to understand why these tariffs have been imposed. I personally feel that there are three reasons. One, Trump is not happy with India because we are a member of BRICS and somehow, in his head, he has got this notion that BRICS is an anti-America alliance which is hell-bent on creating an alternative currency to the dollar. So, because of that, he feels that India should not be a member of the BRICS. Two, Operation Sindoor and his so-called role in bringing about the ceasefire,' Vikas Swarup said. 'We have been saying right from the beginning that Trump had no role because we do not accept external mediation. This ceasefire was mediated directly between the DGMOs of Pakistan and India at the request of the DGMO of Pakistan. Trump has now said almost 30 times that it was he who got the two countries to stop back from the brink, who stopped a nuclear conflagration in the subcontinent. So, obviously he is miffed that India has not acknowledged his role, whereas Pakistan has not only acknowledged his role but has even nominated him for a Nobel Peace Prize,' he added. India had carried out Operation Sindoor in early May in response to Pahalgam terror attack and carried out precision strikes on terror infrastructure in Pakistan and PoJK. India had replled subsequent Pakistani aggression and pounded its airbases. Referring to Bilateral Trade Agreement (BTA) talks between India and US, Vikas Swarup said Trump is resorting to pressure tactics to get India to sign on his maximalist demands. '...This is part of his pressure tactics to get India to sign on the dotted line on the maximalist demands that the US is making with regard to access to our dairy and agriculture and GM Crops. We have not caved in and it is also in a way a signal to Russia because he is also frustrated that he has not been able to get President Putin to agree to the ceasefire that Zelenskyy has agreed to,' he said. Vikas Swarup referred to the summit meeting between President Trump and President Putin in Alaska on August 15 over the Ukraine conflict. 'Now they are meeting in Alaska on 15th August. If there is a positive outcome of the Alaska talks then I am 100% sure that the Russia sanctions will be off the table because Putin is not going to accept a ceasefire and yet be saddled with economic sanctions,' he said. India and the US initiated talks for a just, balanced, and mutually beneficial Bilateral Trade Agreement (BTA) in March this year, aiming to complete the first stage of the Agreement by October-November April 2, 2025, President Trump signed an executive order for reciprocal tariffs on various trade partners, imposing varied tariffs in the range of 10-50 per cent. He subsequently kept the tariffs in abeyance for 90 days, while imposing a 10 per cent baseline tariff. The deadline was to end on July 9, and the US administration later pushed it to August 1. During the ongoing Monsoon session of Parliament, Commerce and Industry Minister Piyush Goyal made a statement in both Houses, affirming that the government is examining the impact of tariffs and will take all necessary steps to safeguard the national interest. (ANI)
