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Yahoo
16 minutes ago
- Yahoo
Tariffs hit, Apple rises
By Mike Dolan LONDON (Reuters) - What matters in U.S. and global markets today By Mike Dolan, Editor-At-Large, Finance and Markets Wall Street and global stocks rose on Thursday, as Apple's domestic investment push, dovish noises on interest rates and a generally upbeat earnings season trumped chip stock hits and the arrival of the U.S. tariff day. The day's diary is topped by a likely Bank of England interest rate cut and U.S. weekly jobless numbers that take on unusual importance in light of last week's July payrolls confusion. * Stocks in Asia and Europe pushed higher even as U.S. tariffs were introduced, with Shanghai's index hitting its highest since 2021 following above-forecast Chinese import and export numbers for July. Although eight major trading partners accounting for about 40% of U.S. trade flows have reached framework deals to reduce tariffs to 15% or less, imports from Brazil, India, Switzerland and Canada face rates of 35% to 50%. Though, Taiwan and South Korea are breathing sighs of relief following exemptions from 100% chip import levies. * Expectations for Federal Reserve easing as soon as next month were buoyed again as two regional Fed chiefs - Minneapolis Fed boss Neel Kashkari and San Francisco's Mary Daly - indicated more rate cuts were coming this year. President Donald Trump said on Wednesday he would likely appoint a temporary replacement to Adriana Kugler's vacant Fed board seat. Meanwhile, candidates to replace Chair Jerome Powell next year are likely down to three, including former Fed Governor Kevin Warsh and White House adviser Kevin Hassett. * Fed easing speculation knocked the dollar back to 10-day lows, with Treasury yields remaining close to the week's three-month lows despite another underwhelming 10-year auction overnight and a long bond sale later today. Sterling was slightly firmer against the dollar but down on the euro, as the BoE looks set to lower British rates by a quarter point to 4% later today. Make sure to check out today's column, where I argue that investors looking for the impact of Trump's tariffs are looking at the wrong earnings season. Today's Market Minute * President Donald Trump's higher tariff rates of 10% to 50% on dozens of trading partners kicked in on Thursday, testing his strategy for shrinking U.S. trade deficits without massive disruptions to global supply chains, higher inflation and stiff retaliation from trading partners. * Indian Prime Minister Narendra Modi said on Thursday he will not compromise the interests of the country's farmers even if he has to pay a heavy price, in his first comments after Trump's salvo of a 50% tariff on Indian goods. * Russian President Vladimir Putin and U.S. President Donald Trump will meet in the coming days, Kremlin aide Yuri Ushakov said on Thursday, in what would be the first summit between leaders of the two countries since 2021. * Markets' relatively speedy acceptance of higher tariffs and threats to institutional independence raises the question: What happened to the last 40 years of economic orthodoxy? ROI columnist Jamie McGeever asks whether the Washington Consensus has been broken. * The U.S.-EU trade deal has been heavily criticised as a capitulation by the bloc. But Panmure Liberum investment strategist Joachim Klement argues that the European Union is likely not only to suffer less than the U.S. but may even see its economy benefit from the new global tariff regime. Latest Donald Trump News | Top Headlines on Donald Trump | Reuters Discover the latest headlines on Donald Trump, including coverage of his second presidency, trade and tariff policies, legal developments and more. Chart of the day Trump said on Wednesday that the United States would impose a tariff of about 100% on imports of semiconductors but offered up a big exemption - it will not apply to companies that are manufacturing in the U.S. or have committed to do so. South Korea's top trade envoy said major chipmakers Samsung Electronics and SK Hynix would not be subject to the 100% levies. Taiwanese chip contract manufacturer TSMC was expected to be relatively unscathed as it has U.S. factories, so key customers such as Nvidia are unlikely to face increased tariff costs for U.S-made chips. Malaysia's trade minister Tengku Zafrul Aziz warned parliament his country would risk losing a major market in the United States. Today's events to watch * Bank of England policy decision and monetary policy report (7:00 AM EDT), with press conference from BoE Governor Andrew Bailey * U.S. weekly jobless claims (8:30 AM EDT), Q2 labor costs and productivity, June consumer credit (3:00 AM EDT); Mexico July inflation (8:00 AM EDT) * Mexico central bank policy decision (3:00 PM EDT) * Atlanta Federal Reserve President Raphael Bostic speaks * U.S. corporate earnings: Eli Lilly, Gilead, Zimmer Biomet, Warner Bros Discovery, Expedia, ConocoPhillips, Sempra, Constellation Energy, Alliant Energy, Evergy, Consolidated Edison, Motorola Solutions, Microchip Technology, GenDigital, Ralph Lauren, Monster Beverages, Block, GoDaddy, Live Nation, Wynn Resorts, Trade Desk, EOG, * U.S. Treasury auctions $25 billion of 30-year bonds Want to receive the Morning Bid in your inbox every weekday morning? Sign up for the newsletter here. You can find ROI on the Reuters website, and you can follow us on LinkedIn and X. Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias. (by Mike Dolan; editing by Alex Richardson) Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
16 minutes ago
- Yahoo
Tech shares lift Wall St futures on tariff exemption hopes
(Reuters) -U.S. stock index futures rose on Thursday, pointing to fresh gains on Wall Street, on signs that major technology companies will avoid President Donald Trump's latest tariffs on chip imports. Apple's shares climbed 3.2% in premarket trading, having risen 5.1% and led gains on Wall Street in the prior session, after Trump said the iPhone maker will invest an additional $100 billion in the U.S., bringing its total commitment to $600 billion over the next four years. Trump also announced a tariff of about 100% on imports of semiconductors but said it would not apply to companies that are manufacturing in the U.S. or have committed to do so. Shares of chipmakers including Nvidia, Advanced Micro Devices and Intel rose in the range of 1.2% to 2.5%. At 06:16 a.m. ET, S&P 500 E-minis were up 53.75 points, or 0.84%, Nasdaq 100 E-minis were up 197 points, or 0.84%, and Dow E-minis were up 274 points, or 0.62%. The president's higher tariffs of 10% to 50% on dozens of trading partners took effect on Thursday. Still, expectations of policy easing by the Federal Reserve - sparked by some disappointing economic data, particularly the July payrolls report - as well as optimism around AI spending by companies have kept markets near record highs. Following the latest jobs data, traders have almost fully priced in a 25 basis point rate cut in September and expect at least two rate cuts this year, according to the CME Group's FedWatch tool. Weekly jobless claims data, due at 08:30 a.m. ET, could offer fresh clues on the health of the labor market and shift rate cut expectations. Investors are also watching for Trump's interim replacement for Fed Governor Adriana Kugler in the coming days, amid expectations that the nominee would be a policy dove who will likely favor bringing interest rates lower. Kugler's resignation leaves an opening at the seven-member Fed Board led by Chair Jerome Powell, who Trump has repeatedly criticized for not cutting borrowing costs. Powell's tenure is due to end in May 2025. Second-quarter earnings barrage continued at full throttle. DoorDash topped revenue estimates and forecasted a stronger-than-expected gross merchandise value for the current quarter. Its shares jumped 8.6%. Lyft's quarterly revenue miss took its stock down 2.3%, even as the ride-hailing firm gave an upbeat gross bookings forecast for the September quarter. Sign in to access your portfolio
Chicago Tribune
18 minutes ago
- Chicago Tribune
President Donald Trump's broad tariffs go into effect, just as economic pain is surfacing
WASHINGTON — President Donald Trump began levying higher import taxes on dozens of countries Thursday, just as the economic fallout of his monthslong tariff threats has begun to create visible damage for the U.S. economy. Just after midnight, goods from more than 60 countries and the European Union became subject to tariff rates of 10% or higher. Products from the EU, Japan and South Korea are taxed at 15%, while imports from Taiwan, Vietnam and Bangladesh are taxed at 20%. Trump also expects the EU, Japan and South Korea to invest hundreds of billions of dollars in the U.S. 'I think the growth is going to be unprecedented,' Trump said Wednesday afternoon. He added that the U.S. was 'taking in hundreds of billions of dollars in tariffs,' but he couldn't provide a specific figure for revenues because 'we don't even know what the final number is' regarding tariff rates. Despite the uncertainty, the Trump White House is confident that the onset of his broad tariffs will provide clarity about the path of the world's largest economy. Now that companies understand the direction the U.S. is headed, the Republican administration believes they can ramp up new investments and jump-start hiring in ways that can rebalance the U.S. economy as a manufacturing power. But so far, there are signs of self-inflicted wounds to America as companies and consumers alike brace for the impact of new taxes. What the data has shown is a U.S. economy that changed in April with Trump's initial rollout of tariffs, an event that led to market drama, a negotiating period and Trump's ultimate decision to start his universal tariffs on Thursday. Economic reports show that hiring began to stall, inflationary pressures crept upward and home values in key markets started to decline after April, said John Silvia, CEO of Dynamic Economic Strategy. 'A less productive economy requires fewer workers,' Silvia said in an analysis note. 'But there is more, the higher tariff prices lower workers' real wages. The economy has become less productive, and firms cannot pay the same real wages as before. Actions have consequences.' Even then, the ultimate transformations of the tariffs are unknown and could play out over months, if not years. Many economists say the risk is that the American economy is steadily eroded rather than collapsing instantly. 'We all want it to be made for television where it's this explosion — it's not like that,' said Brad Jensen, a professor at Georgetown University. 'It's going to be fine sand in the gears and slow things down.' From Laos to Brazil, President Trump's tariffs leave a lot of losers. But even the winners will pay a has promoted the tariffs as a way to reduce the persistent trade deficit. But importers sought to avoid the taxes by importing more goods before the taxes went into effect. As a result, the $582.7 billion trade imbalance for the first half of the year was 38% higher than in 2024. Total construction spending has dropped 2.9% over the past year. The economic pain isn't confined to the U.S. Germany, which sends 10% of its exports to the U.S. market, saw industrial production sag 1.9% in June as Trump's earlier rounds of tariff hikes took hold. 'The new tariffs will clearly weigh on economic growth,' said Carsten Brzeski, global chief of macro for ING bank. The lead-up to Thursday fit the slapdash nature of Trump's tariffs, which have been variously rolled out, walked back, delayed, increased, imposed by letter and frantically renegotiated. The process has been so muddled that officials for key trade partners were unclear at the start of the week whether the tariffs would begin Thursday or Friday. The language of the July 31 order to delay the start of tariffs from Aug. 1 only said the higher tax rates would start in seven days. Trump on Wednesday announced additional 25% tariffs to be imposed on India for its buying of Russian oil, bringing its total import taxes to 50%. A top body of Indian exporters said Thursday the latest U.S. tariffs will impact nearly 55% of the country's outbound shipments to America and force exporters to lose their long-standing clients. 'Absorbing this sudden cost escalation is simply not viable. Margins are already thin,' S.C. Ralhan, president of the Federation of Indian Export Organizations, said in a statement. The Swiss executive branch, the Federal Council, was expected to hold an extraordinary meeting Thursday after President Karin Keller-Sutter and other top Swiss officials returned from a hastily arranged trip to Washington in a failed bid to avert steep 39% U.S. tariffs on Swiss goods. Import taxes are still coming on pharmaceutical drugs, and Trump announced 100% tariffs on computer chips. That could leave the U.S. economy in a place of suspended animation as it awaits the impact. The president's use of a 1977 law to declare an economic emergency to impose the tariffs is also under challenge. The impending ruling from last week's hearing before a U.S. appeals court could cause Trump to find other legal justifications if judges say he exceeded his authority. Even people who worked with Trump during his first term are skeptical that things will go smoothly for the economy, such as Paul Ryan, the former Republican House speaker, who has emerged as a Trump critic. 'There's no sort of rationale for this other than the president wanting to raise tariffs based upon his whims, his opinions,' Ryan told CNBC on Wednesday. 'I think choppy waters are ahead because I think they're going to have some legal challenges.' Still, the stock market has been solid during the recent tariff drama, with the S&P 500 index climbing more than 25% from its April low. The market's rebound and the income tax cuts in Trump's tax and spending measures signed into law on July 4 have given the White House confidence that economic growth is bound to accelerate in the coming months. Global financial markets took Thursday's tariff adjustments in stride, with Asian and European shares and U.S. futures mostly higher. Brzeski warned: 'While financial markets seem to have grown numb to tariff announcements, let's not forget that their adverse effects on economies will gradually unfold over time.' As of now, Trump still foresees an economic boom while the rest of the world and American voters wait nervously. 'There's one person who can afford to be cavalier about the uncertainty that he's creating, and that's Donald Trump,' said Rachel West, a senior fellow at The Century Foundation who worked in the Biden White House on labor policy. 'The rest of Americans are already paying the price for that uncertainty.'
