Stocks diverge while tracking US trade deal prospects
Asian markets ended mixed after both the S&P 500 and the Nasdaq hit records on Monday, with Shanghai rising but Tokyo sinking more than 1% after Trump threatened more tariffs on Japan in a row over rice and autos.
Profit-taking pulled those two indices lower in early US deals, while the Dow continued to close in on a record high. 'The next few days are going to be testing times for governments in many parts of the world as they try to hammer out trade deals with the US,' said Dan Coatsworth, an investment analyst at AJ Bell.
While few trade agreements have been reached so far, the week began with some optimism as Canada and the United States agreed to restart trade talks after Ottawa scrapped a digital services tax contested by US tech giants.
Comments from Trump and some of his top officials also suggested the deadline was flexible, and that several pacts were nearly completed.
'We expect risk sentiment to remain shaky until a deal is agreed... investors are on pause for now and are waiting for concrete news before making their next move,' said Kathleen Brooks, research director at trading group XTB.
The dollar managed to advance but remained under pressure after its worst start to the year since 1973, with confidence deteriorating among many foreign investors since Trump returned to the White House.
The Dollar Index, which compares the greenback to a basket of major currencies, fell 10.8% in the first half of the year, its steepest decline since the dollar became the global benchmark currency.
Investors increasingly expect the Federal Reserve to cut rates at least twice this year -- with Trump having loudly criticised Fed chief Jerome Powell for not doing so sooner -- and all eyes will be on US jobs data due this week.
Powell hit back on Tuesday at a central bankers' gathering in Portugal, insisting that the Fed must remain 'completely non-political' to successfully pursue its strategy of financial and economic stability.
Investors are also keeping an eye on Trump's multitrillion-dollar tax-cutting bill, whose passage remains uncertain over concerns that it will add $3 trillion to US deficits.
The dollar's recent weakness reflects 'ongoing concerns over trade, tariffs, national debt and central bank independence', said David Morrison at Trade Nation.
The Tokyo market drop came after Trump threatened to impose a fresh levy on Japan over a row about the country not buying US rice.
Japan has seen rice prices double over the past year owing to supply issues caused by various factors, piling pressure on Prime Minister Shigeru Ishiba ahead of elections this month.
Trump also hit out at what he considered an unfair balance in the trade in cars between the two countries, and floated the idea of keeping a 25-percent tariff on autos in place.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Gulf Insider
5 hours ago
- Gulf Insider
Dubai Property Demand Rises Among Global Investors
A Dubai-based property developer has reported growing international interest in the emirate's real estate market following a series of roadshows conducted over the past 12 months. Object 1, part of the international TSZ Group, held more than 100 events across Europe, Asia, Africa, and America, uncovering trends around investor motivations and market shifts as global appetite for Dubai property continues to grow. The roadshows revealed that decision-making factors among investors included potential for return on investment, flexible payment plans, quality furnishing, and access to modern amenities and smart home technology. Demand was observed from investors in Iran, Turkey, and India, as well as from Francophone and German-speaking regions. Africa has emerged as a market with engagement levels. Object 1's data showed that most investors were driven by portfolio diversification, with commitments starting from $300,000 for one- or two-bedroom apartments. First-time buyers in Dubai typically chose studio units, while high-net-worth individuals showed interest in larger residences within premium developments. International buyers demonstrated interest in residences with European finishes, with many citing home appliances by European brands as a value-add. This reflects a shift in the perception of Dubai property, where quality, design, and convenience are becoming as important as location and price. 'Based on the insights we gathered during our roadshows, we are now refining our international strategy for the year ahead. We plan to increase our focus on markets that have shown strong engagement, while continuing to prioritise India, Singapore, and the UK. This approach is supported by the results we have seen so far, including a 220 per cent increase in our sales value and a 140 per cent increase in sales volume in Q1 2025 compared to the same period last year,' Ismail Gasanov, Head of Business Development at Object 1 said. The findings showed North America has recently entered Object 1's top ten global markets, driven by a shift in outbound capital from the US and Canada toward high-growth international destinations. Object 1 attributes much of its international success to collaborations with real estate agencies and local market experts. These partnerships have enabled the company to adapt its outreach to suit regional investor expectations, resulting in higher-quality engagement and event outcomes. Looking ahead, Object 1 plans to continue its international outreach through a new phase of roadshows, private investor events, and market-specific campaigns. The company remains focused on its core mission of developing future-ready, high-quality communities that deliver long-term value to both residents and investors while contributing to the next chapter of Dubai's real estate landscape. Also Read: UAE Showcases Eco-Friendly Cloud-Seeding Advances
Daily Tribune
19 hours ago
- Daily Tribune
Trump's Mega-Bill: Key Claims Under Scrutiny as Critics Raise Economic Concerns
President Donald Trump's flagship legislative package—dubbed the 'big beautiful bill'—has ignited intense debate across party lines, with Democrats and even some Republicans raising concerns over its financial implications, tax impacts, and proposed welfare changes. The bill is being positioned by the White House as a boost to economic growth and a safeguard against tax hikes, but independent experts warn it could significantly widen the national deficit, cut healthcare coverage, and shift tax benefits toward the wealthy. 📉 Will the Bill Cut or Expand the Deficit? While the administration claims the legislation will reduce the national deficit by over $2 trillion, multiple independent analyses project the opposite. Estimates from official sources forecast the bill could add over $3.3 trillion to the deficit in the next decade. The projected rise is primarily attributed to the bill's deep tax cuts, which are expected to outweigh proposed spending cuts. Analysts suggest that although there may be a short-term economic uplift, long-term effects could include higher national debt, rising interest rates, and reduced investment in critical sectors. 🏥 Impact on Medicaid: Deep Cuts Expected Despite assurances from President Trump that Medicaid 'is left the same,' independent health policy groups estimate up to $1 trillion in Medicaid cuts over the next ten years. These changes would likely affect millions of low-income Americans who depend on Medicaid for healthcare services. Official projections indicate nearly 12 million people could lose coverage by 2034, though the administration argues some of these would be individuals without legal status. 💰 Taxes: Who Gains and Who Pays More? A major talking point for the administration has been the claim that the bill prevents a 68% tax hike. However, experts note that the actual average increase, if previous tax cuts expire without renewal, would be closer to 7.5%. The legislation aims to extend and expand tax cuts first introduced in 2017. Yet, studies show the majority of benefits would go to higher-income earners, with over 60% of the tax relief going to individuals earning above $217,000 annually. Critics argue the bill promotes an upward redistribution of wealth at the expense of lower-income Americans.
Gulf Insider
a day ago
- Gulf Insider
Iran Reportedly Made Plans To Litter Strait Of Hormuz
The U.S. launched 'Operation Midnight Hammer' on June 22, deploying stealth bombers to strike Iran's nuclear facilities at Fordow, Natanz, and Isfahan using Massive Ordnance Penetrator bombs. President Trump declared the sites were 'totally obliterated.' In retaliation, Iran's parliament voted to authorize the closure of the Strait of Hormuz—a critical maritime chokepoint through which 20% of the world's oil flows—sparking renewed anxiety among global energy traders over the threat to vital tanker lanes. As readers understand, any move by Iran to close the critical waterway would instantly disrupt nearly one-fifth of the world's oil shipments and trigger substantial—and potentially cascading—economic harm (energy inflation) worldwide. However, those threats ultimately fell short in the days that followed, and Brent crude futures have since returned to the $67-a-barrel level, effectively roundtripping the entire move. Iran has several military and asymmetric tools at its disposal to disrupt or close the Strait of Hormuz, including: Naval Mines Fast Attack Boats & Swarm Tactics Anti-Ship Missiles Submarine Operations Seizing or Boarding Tankers Shore-Based Artillery or Rocket Attacks or Drone Strikes GPS Scrambling Cyberattacks on Port Infrastructure Coordinated Proxy Attacks In the lead-up to and during Operation Midnight Hammer, widespread GPS interference was reported across the Strait of Hormuz. Multiple sources we highlighted indicated a noticeable slowdown in tanker traffic, as navigation systems were degraded and insurance premiums for vessels surged. A new Reuters report, citing anonymous U.S. officials, reveals that intelligence indicated Tehran was preparing to blockade the Strait of Hormuz using one of its most effective and low-cost tactics: littering the narrow shipping corridor with naval mines. More color on the report: The previously unreported preparations, which were detected by U.S. intelligence, occurred some time after Israel launched its initial missile attack against Iran on June 13, said the officials, who requested anonymity to discuss sensitive intelligence matters. The loading of the mines – which have not been deployed in the strait – suggests that Tehran may have been serious about closing one of the world's busiest shipping lanes, a move that would have escalated an already-spiraling conflict and severely hobbled global commerce. Reuters was not able to determine precisely when during the Israel-Iran air war Tehran loaded the mines, which – if deployed – would have effectively stopped ships from moving through the key thoroughfare. It is also unclear if the mines have since been unloaded. The sources did not disclose how the United States determined that the mines had been put on the Iranian vessels, but such intelligence is typically gathered through satellite imagery, clandestine human sources or a combination of both methods. . . . The two officials said the U.S. government has not ruled out the possibility that loading the mines was a ruse. The Iranians could have prepared the mines to convince Washington that Tehran was serious about closing the strait, but without intending to do so, the officials said. Israel's 12-day war with Iran and Tehran's ultimately hollow threat (so far) to close the Strait of Hormuz appear to have had limited lasting impact on global oil markets, reflected in Brent crude trading around $68 on Wednesday afternoon. Also read: 'Unacceptable' – US Officials Slam Iran's Suspending Cooperation With UN Nuclear Watchdog
