
Wall Street set for cautious open ahead of US inflation data
Wall Street markets fell late on Tuesday and U.S. Treasury yields rose after U.S. consumer price data for June pointed to higher costs for some goods, prompting investors to scale back their expectations for U.S. Federal Reserve rate cuts.
The threat of further tariffs also weighed on market sentiment after President Donald Trump on Tuesday said letters notifying smaller countries of their U.S. tariff rates would go out soon. Trump threatened on Saturday to impose a 30 per cent tariff on imports from Mexico and the European Union starting on August 1.
At 1003 GMT, the MSCI World Equity index was down 0.1 per cent on the day, having been knocked off a record-high in the previous session after the inflation data.
The pan-European STOXX 600 was down 0.1 per cent while London's FTSE 100 was up 0.2 per cent.
Britain's annual rate of consumer price inflation unexpectedly rose to its highest in over a year. The pound rose slightly against the dollar after the data.
U.S. stock index futures pointed to a lower open for Wall Street.
Traders will be monitoring U.S. producer price data, due later on Wednesday, to see the extent of the inflationary pressures.
'So far we have yet to see a decisive and meaningful pass-through from tariffs into the inflation readings," said Vas Gkionakis, senior economist and strategist at Aviva Investors.
"It is likely to come, but we'll just have to wait and see the timing and the extent."
The Fed has been keeping interest rates steady as it has waited for indications of the inflationary impact from tariffs, which Chair Jerome Powell had said he expected in the summer. Traders are betting that the Fed will start cutting rates in September.
Trump has railed against Powell for not cutting rates sooner, prompting investor concern about whether the central bank's independence could be eroded.
The U.S. dollar, which hit multi-week highs after Tuesday's data, cooled on Wednesday, with the dollar index at 98.547, little changed on the day.
The euro was up 0.2 per cent at $1.1615.
The benchmark 10-year German Bund yield was little changed at 2.707 per cent and the 10-year U.S. Treasury yield was at 4.4753 per cent, retreating from the previous session's highs.
Investors are also paying attention to earnings data. Bank earnings due on Wednesday include Goldman Sachs, Morgan Stanley and Bank of America.
Oil prices were lower, with Brent crude futures around $68.5 a barrel, as signs of stronger Chinese crude consumption were outweighed by investor caution about the wider economic impact from U.S. tariffs.
Hashtags

Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles


CNA
31 minutes ago
- CNA
Dollar edges up against euro, slips versus yen on trade deal progress
The dollar edged higher against the euro on Thursday following progress in U.S. trade talks with key partners, but slipped against the yen as Japan's currency got a lift from expectations for higher interest rates. The Japanese central bank's deputy governor, Shinichi Uchida, said a trade deal with Washington had reduced economic uncertainty, comments that fuelled optimism in the market about the potential resumption of interest rate hikes. Still, some analysts think the yen faces persistent headwinds due to domestic political uncertainty following Sunday's upper house election. The European Union is nearing a deal that would impose a broad 15 per cent tariff on EU goods entering the United States, roughly in line with economists' expectations. Meanwhile, risk assets rallied as the trade deals eased fears over the economic fallout of a global trade war. The risk-sensitive Australian dollar rose to an eight-month high of $0.6625 on Thursday. The euro fell 0.1 per cent at $1.1760, not far from a high of $1.1830 it hit earlier this month, which marked its strongest level in more than three years. "We maintain our view that we would see some wobbles in risky assets in August as we see some slowdown in the (U.S.) employment data," said Mohit Kumar, economist at Jefferies. "As of now, there has been very little tariff impact on the hard data. But that does not mean it's not coming," he added, arguing it would take at least three months to see the fallout of trade duties on hard economic figures. Against the yen, the dollar fell 0.10 per cent to 146.35, extending its fall against the Japanese currency to a fourth straight session. Olivier Korber, forex strategist at Societe Generale, expects the yen to strengthen further, citing support from the trade deal and prospects for higher interest rates. "The local press reported that he (Prime Minister Shigeru Ishiba) should decide if he will resign in late August and, if that were to happen, a new party leader would probably be selected in September," Korber said. "This would ensure a smoother political transition, thus limiting market uncertainty," he added. Ishiba denied on Wednesday he had decided to quit after a source and media reports said he planned to announce his resignation to take responsibility for a bruising upper house election defeat. Trade negotiations aside, market focus is also on a rate decision from the European Central Bank later in the day. Expectations are for policymakers to keep rates unchanged, though markets will look out for what they say about the outlook for monetary policy. Investors generally expect one more ECB rate cut by the end of the year, most likely in December. Data showed that German business activity continued to grow marginally in July.


CNA
an hour ago
- CNA
Chipmaker STMicro makes first loss in over a decade, hit by restructuring costs
AMSTERDAM :STMicroelectronics reported a second-quarter loss on Thursday, its first in more than a decade, underperforming market expectations as it was hit by restructuring costs. The company's shares fell 11 per cent in early trade, on track for their worst day since July last year. The Franco-Italian chipmaker, which makes power chips for Tesla's drivetrains and eSim modules for Apple's iPhones, posted a loss of $133 million for the quarter, missing the average $56.2 million profit analysts expected in an LSEG poll. The operating loss included a $190 million impairment, restructuring charges and other costs, STMicro said in a statement. Without the restructuring and impairment costs, profits would have reached $57 million, the company added. STMicro's heavy reliance on in-house manufacturing, representing about 80 per cent of sales, has burdened it with underused factories and high staff costs when the market slows, unlike rivals Infineon and NXP that use more contract manufacturing, analysts say. Chipmakers exposed to the struggling automotive, industrial, and consumer chip markets such as STMicro, Texas Instruments, or NXP have faced a sales slump, hit by low demand, high inventories, and geopolitical disruptions. STMicro, one of Europe's largest chipmakers, unveiled a cost-cutting plan last year to restructure its manufacturing facilities and save hundreds of millions of dollars by 2027. The plans, which included cutting 5,000 jobs in France and Italy over the next three years, started a spat between the French and Italian governments, who jointly own a stake of 27.5 per centin the firm. STMicro's Chief Executive Jean-Marc Chery defended his plan after the Italian government sought to oust him and accused the management of insider trading. STMicro has not provided guidance for the full year of 2025. In June, the company said it saw the early signs of an upcycle, or a period of increased market demand, which would allow it to achieve its second-quarter revenue goal of $2.71 billion.


AsiaOne
an hour ago
- AsiaOne
Indian firm shipped explosives to Russia despite US warnings, World News
WASHINGTON/KYIV/NEW DELHI — An Indian company shipped US$1.4 million (S$1.78 million) worth of an explosive compound with military uses to Russia in December, according to Indian customs data seen by Reuters, despite US threats to impose sanctions on any entity supporting Russia's Ukraine war effort. One of the Russian companies listed as receiving the compound, known as HMX or octogen, is the explosives manufacturer Promsintez, which an official at Ukraine's SBU security service said has ties to the country's military. The official said that Ukraine launched a drone attack in April against a Promsintez-owned factory. According to the Pentagon's Defence Technical Information Centre and related defence research programmes, HMX is widely used in missile and torpedo warheads, rocket motors, exploding projectiles and plastic-bonded explosives for advanced military systems. The US government has identified HMX as "critical for Russia's war effort" and has warned financial institutions against facilitating any sales of the substance to Moscow. The HMX sale to Russian firms has not been previously reported. Russian defence manufacturers have been working around the clock for the past several years to sustain President Vladimir Putin's war in Ukraine, which intensified with Russia's full-scale invasion of its neighbour in 2022. India, which has recently forged closer ties with the United States in an effort to counterbalance China's growing influence, has not abandoned its longstanding military and economic ties with Moscow. India's trade with Russia — especially its purchases of Russian oil — has remained robust, even as Western nations have tried to cripple Russia's war economy with sanctions. US President Donald Trump threatened earlier in July to hit nations with a 100 per cent tariff if they continued purchasing Russian crude. The US Treasury Department has the authority to sanction those who sell HMX and similar substances to Russia, according to three sanctions lawyers. HMX is known as a "high explosive," meaning it detonates rapidly and is designed for maximum destruction. Reuters has no indication that the HMX shipments violated Indian government policy. One Indian official with knowledge of the shipments said that the compound has some limited civilian applications, in addition to its better-known military uses. India's foreign ministry said in a statement: "India has been carrying out exports of dual-use items taking into account its international obligations on non-proliferation, and based on its robust legal and regulatory framework that includes a holistic assessment of relevant criteria on such exports." The US State Department did not comment on the specific shipments identified by Reuters but said it had repeatedly communicated to India that companies doing military-related business are at risk of sanctions. "India is a strategic partner with whom we engage in full and frank dialogue, including on India's relationship with Russia," a spokesperson said. "We have repeatedly made clear to all our partners, including India, that any foreign company or financial institution that does business with Russia's military industrial base are at risk of US sanctions." Russia's defence ministry did not respond to a request for comment. "While India has not typically been among the primary jurisdictions used for circumventing sanctions, we are aware that isolated cases can occur," Ukrainian presidential adviser Vladyslav Vlasiuk told Reuters. "We can confirm that the Russian company Promsintez has appeared on our radar in the past, including in connection with co-operation involving Indian counterparts," added Vlasiuk, President Volodymyr Zelenskiy's top sanctions official. Washington woos New Delhi Reuters identified two HMX shipments sent in December by Indian firm Ideal Detonators Private Limited, both of which were unloaded in St. Petersburg, according to the Indian customs data. An Indian government official with direct knowledge of the shipments confirmed them. [[nid:720553]] One shipment, worth US$405,200, was purchased by a Russian company called High Technology Initiation Systems, the data show. The other shipment, worth more than US$1 million was purchased by Promsintez. Both purchasers are based in Samara Oblast, near the border of Kazakhstan in southern Russia, according to the data. Ideal Detonators Private Limited, based in the Indian state of Telangana, did not respond to a request for comment. Promsintez and High Technology Initiation Systems also did not respond to requests for comment. While several Indian entities were sanctioned during the administration of former US President Joe Biden for supporting Russia's war effort, sanctions were applied sparingly due to geopolitical considerations, according to two US officials who worked on sanctions under Biden. Under Trump, Russia-related sanctions work has slowed to a trickle, and it is not clear if the United States will take further action against Indian companies doing business with Russia's defence industry. Washington has long sought closer relations with India to pull the South Asian country away from China. Eric Prince, a partner at Washington-based law firm Akin, said the US government often prefers to communicate its concerns privately to allies and only take punitive actions as a last resort. [[nid:720550]]