Wall Street edges higher, dollar bounces back amid tariff talks, economic data
NEW YORK :Wall Street edged higher and the dollar rebounded on Tuesday as market participants looked past ongoing tariff wrangling and lowered economic expectations ahead of Friday's crucial U.S. employment report.
All three major U.S. stock indexes were up modestly while gold backed down from a near four-week high in opposition to the strengthening greenback.
"Today is a day with no big drivers," said Tim Ghriskey, senior portfolio strategist Ingalls & Snyder in New York. "The market is becoming more comfortable with Trump's negotiation style. He comes out with guns blazing and then is, you know, very happy to, you know, put his guns away, having made his point.
"He expects a reasonable settlement at least, which he'll call a huge win, of course," Ghriskey added. "But in reality he's not looking to punish our trading partners; he's looking for incremental adjustments to tariffs."
The Organization for Economic Cooperation and Development (OECD) said the global economy is on course for a more drastic slowdown than it expected only a few months ago. It cited the fallout from Trump's trade war, and warned that growth will be even weaker as protectionism increases, fuelling inflation and disrupting supply chains.
That sentiment was shared by the United Nations' International Labor Organization (ILO), which downgraded its global employment forecast due to worsening economic conditions arising from trade tensions.
In economic data, a report from the U.S. Labor Department showed the number of unfilled U.S. jobs unexpectedly rose in April, while new orders for factory-made goods posted a steeper drop than analysts anticipated.
Investors are now training their focus on the May employment report, expected on Friday. Economists polled by Reuters expect the U.S. economy added 130,000 jobs last month, with the unemployment rate standing pat at 4.2 per cent.
The Dow Jones Industrial Average rose 30.12 points, or 0.07 per cent, to 42,334.83, the S&P 500 rose 12.36 points, or 0.21 per cent, to 5,948.30 and the Nasdaq Composite rose 100.78 points, or 0.52 per cent, to 19,343.39.
European stocks were moderately lower as investors exercised caution while awaiting further developments in tariff negotiations, but pared losses in the wake of a report that Euro Zone inflation has eased below the European Central Bank's (ECB) target, paving the way for further policy easing.
MSCI's gauge of stocks across the globe rose 0.37 points, or 0.04 per cent, to 883.25. The pan-European STOXX 600 index fell 0.13 per cent, while Europe's broad FTSEurofirst 300 index fell 1.85 points, or 0.09 per cent.
Emerging market stocks rose 3.26 points, or 0.28 per cent, to 1,157.03. MSCI's broadest index of Asia-Pacific shares outside Japan closed higher by 0.37 per cent to 609.76, while Japan's Nikkei fell 23.86 points, or 0.06 per cent, to 37,446.81.
The dollar bounced back from a six-week low, even as concerns persisted over potential economic damage in the wake of Trump's trade war.
The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, rose 0.58 per cent to 99.15, with the euro down 0.49 per cent at $1.1386.
Against the Japanese yen, the dollar strengthened 0.74 per cent to 143.75.
Yields on 10-year U.S. Treasuries dipped but were off their lows in the wake of weaker than expected U.S. economic data.
The yield on benchmark U.S. 10-year notes fell 2.2 basis points to 4.44 per cent, from 4.462 per cent late on Monday.
The 30-year bond yield fell 3.3 basis points to 4.9614 per cent from 4.995 per cent late on Monday.
The 2-year note yield, which typically moves in step with interest rate expectations for the Federal Reserve, rose 0.8 basis points to 3.953 per cent, from 3.945 per cent late on Monday.
Crude prices extended their gains, supported by roiling geopolitical concerns as the war in Ukraine intensified and Iran appeared poised to reject a U.S. nuclear deal proposal.
U.S. crude rose 1.87 per cent to $63.69 a barrel and Brent rose to $65.68 per barrel, up 1.62 per cent on the day.
Gold prices retreated from a near four-week high amid profit-taking and in opposition to the strengthening dollar.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
CNA
26 minutes ago
- CNA
Europe waits for ECB cut after US-driven bond rally
LONDON : European markets made a steady start on Thursday ahead of an expected ECB interest rate cut, and after weak U.S. economic numbers had triggered a sharp government bond rally and nudged Wall Street toward bull market territory. With the European Central Bank expected to deliver another quarter point cut in the euro zone's borrowing costs to 2 per cent later, investors are keen to hear what Christine Lagarde and other policymakers think might come next, given the uncertainty over a potential U.S. trade deal. German data already out showed industrial orders unexpectedly rose in April due to strong domestic demand. That helped lift Europe's STOXX 600 index for a third day running as Germany's approval of a tax relief package also lifted sentiment. The euro and regional government bonds barely budged, however, as traders waited on the ECB's move. With euro zone inflation now safely in line with the central bank's 2 per cent target, policymakers have widely telegraphed what would be their eighth cut in the current cycle later. "A cut today is pretty much a done deal," said Oxford Economics' Oliver Rakau, who expected Lagarde to sound even more non-committal than usual in the post rate-decision press conference. The combination of trade talks with the U.S. and robust data coming out of Germany increased the chance that this might even be the last cut, although for now Rakau still expects two more before the end of the year. "A sudden trade deal could shift things along a lot," he said. "They don't want to be wrongfooted and German fiscal stimulus also coming." The currency markets were largely in a holding pattern. The dollar had dropped in the previous session after weak U.S. jobs and services data, putting the focus squarely on non-farm payrolls due on Friday. The yield on the 30-year U.S. Treasury bond fell more than 7 basis points to 4.911 per cent, while the benchmark 10-year yield dropped to 4.385 per cent, having been at a 3-month high of 4.629 per cent just a couple of weeks ago. TRADE TALKS Trump's doubling of tariffs on steel and aluminium imports had also become effective on Wednesday, hitting Canada and Mexico in particular. The same day, his administration sought "best offers" from trading partners to stop other import levies taking effect in July. Japan was sending key trade negotiator Ryosei Akazawa to the U.S. on Thursday for another round of talks. Germany's chancellor, Friedrich Merz, was also in Washington to meet Trump. MSCI's broadest index of Asia-Pacific shares outside Japan had jumped 0.7 per cent overnight, with South Korea's KOSPI touching an 11-month high amid optimism around new President Lee Jae-myung and Hong Kong's Hang Seng up 1 per cent. "There is a degree of complacency in the equity markets in the sense there is an expectation now that there will continue to be resolution and deals being done," said Chris Nicol, Australia equity strategist at Morgan Stanley. "The black and white of the policy is still to be put in stone and the growth and inflation impacts are still relatively uncertain." The dollar index, which measures the greenback against a basket of currencies, rose 0.1 per cent to 98.8, trimming its 0.5 per cent slide on Wednesday. Among the individual moves the dollar was up 0.3 per cent against the yen at 143.34, 0.25 per cent higher against the Swiss franc at 0.82025 francs and virtually unchanged against the euro and sterling at just over $1.14 and $1.35 respectively. Gold pared gains from the previous day, while oil steadied after slipping on a build in U.S. inventories and as Saudi Arabia cut to its July prices for Asian crude buyers. [O/R] Spot gold edged 0.1 per cent lower to $3,374 per ounce. Brent crude ticked up 0.4 per cent to just over $65 a barrel.
CNA
an hour ago
- CNA
Shops near Harvard brace for revenue drop as Trump suspends visas for new international students
CAMBRIDGE, Massachusetts: Small businesses near Harvard University are worried about a loss of revenue as United States President Donald Trump's tussle with the Ivy League school over international students continues. Just outside the university campus is Harvard Square, a bustling cultural and commercial hub with a lively mix of eateries, cafes, bookstores and other shops. Kari Kuelzer, owner of Grendel's Den Restaurant & Bar – a pub that has called the square home for more than 50 years – told CNA that students account for a third of her business. Kuelzer said she is unsure if her pub, which was opened by her parents, can survive if Harvard is forced to shut its doors to foreign students. 'Where are we going to get those dollars? They're not going to just magically materialise,' she said. Like Grendel's Den, many establishments in the area are locally-owned and rely heavily on students as a key source of income. IMPACT ON LOCAL BUSINESSES There are around 6,800 international students at Harvard, making up about a quarter of the university's student body. The Harvard Square Business Association, which represents more than 300 stores in the district, is worried about the impact on its members if Trump successfully restricts foreign nationals from studying at the elite school. When asked about how retailers are preparing for the possibility of fewer students, Denise Jillson, executive director of the association, said that shop owners may resort to adopting measures used during the COVID-19 pandemic, when there was less footfall. 'Reduction of staff, reduction of hours, less choices on the menu,' she said. Jillson noted, however, that there were government subsidies available during the pandemic to offset a loss of business, unlike the current situation where there is no support. 'We don't have that safeguard now,' she added. LONG-TERM, NATIONWIDE IMPACT Beyond Harvard, experts said contributions by foreign students can be felt far and wide across the nation, and often last much longer than their college years. Data from the Association of International Educators (NAFSA) revealed that more than 1.1 million international students in the US contributed nearly US$44 billion to its economy last year, including spending on tuition, housing, food and entertainment. Foreign students typically pay full tuition fees, making them a vital revenue stream for schools faced with declining domestic enrolment – which, according to the National Center for Education Statistics, fell 15 per cent between 2010 and 2021. Barnet Sherman, a corporate finance professor at Boston University, said that roughly one job is created for every three international students, making up about 350,000 jobs in the country. 'These are not just jobs in larger urban centres like Boston, but across the country, because nearly every city and town across America has a school, either a community college or a local state college, and there are a lot of international students coming,' he added. He noted that 25 per cent of the billion-dollar companies on the US stock exchanges were started by international students. '(The) implication is that it's not just the money that is potentially being lost now, but the multiplier effect of this money over time and the number of jobs and wealth that international students have created and will continue to create,' he added. WHAT'S GOING ON BETWEEN TRUMP AND HARVARD? In mid-April, the Trump administration ordered the freezing of billions of dollars in federal funding to Harvard. It accused the university of allowing anti-Semitism to flourish on campus and discriminating in its enrolment and hiring practices – claims that Harvard has strongly denied. The White House on May 22 tried to revoke the university's ability to enrol international students. A day later, a judge temporarily blocked the move. On Wednesday (Jun 4), Trump signed an executive order suspending the entry of foreign nationals seeking to study or participate in exchange programmes at Harvard. The dispute between Trump and the nation's oldest, wealthiest and most prestigious university is still ongoing. Secretary of State Marco Rubio also previously announced the federal government will 'aggressively' revoke the visas of Chinese students nationwide, especially those with connections to the Chinese Communist Party or studying in critical fields.
CNA
2 hours ago
- CNA
UK's Wise plans US primary listing amid London market woes
Money transfer company Wise on Thursday said it intends to move its primary listing to the U.S. from London, the latest British company to do so, sending shares up over 8 per cent. Wise, which will maintain a secondary listing in London, had been exploring its listing options lately - a shift seen across the London markets due to stunted growth opportunities and lower valuations. "We believe the addition of a primary U.S. listing would help us accelerate our mission and bring substantial strategic and capital market benefits to Wise and our owners," Kristo Kaarmann, co-founder and CEO of Wise said. Shares of the money transfer firm were up 8.7 per cent at 1,177 pence in early trading. They have risen about 40 per cent in the last 12 months. Metals investor Cobalt Holdings, backed by Glencore, also scrapped its plans for a London IPO on Wednesday, which, according to one source, was driven by a lack of demand. In recent months, Unilever chose Amsterdam for the primary listing of its ice-cream business while fast-fashion firm Shein has been considering Hong Kong after plans for a London IPO were met with Chinese regulatory hurdles, according to sources. Wise plans to tap domestic institutional and retail investors in the U.S., the largest global constituent of investors, to shore up global demand for its services, notably Wise Platform - a money transfer service that Wise markets as fast and low-cost. British peer Revolut, which competes Wise on pricing and features, has also been aggressively pushing into the U.S., taking advantage of a lucrative playing field which houses some of the world's largest financial institutions. Wise also reported its annual earnings, where underlying pretax profit rose 17 per cent to 282.1 million pounds ($382 million) in the period, benefiting from strong customer growth and account adoption. ($1 = 0.7371 pounds)
