Asian shares mixed after Nvidia nudges Nasdaq to a record
Shares in Asia traded mixed on Wednesday after an update on U.S. inflation pulled most Wall Street stocks lower, though gains for Nvidia pushed the Nasdaq to another record.
Tokyo's Nikkei 225 edged less than 0.1% lower, to 39,663.40. Investors are focusing on the potential impact of an election for the Upper House of Parliament on Sunday that is expected to lead to tax cuts and higher spending as lawmakers try to restore the waning popularity of the ruling Liberal Democrats.
Worries over a deterioration in Japan's fiscal health have pushed yields of long-term Japanese government bonds to their highest levels in years.
'What's at stake isn't simply which party hands out the biggest bundle of goodies. It's whether the walls holding up Japan's house of debt can withstand another round of fiscal fireworks…' Stephen Innes of SPI Asset Management said in a commentary.
Elsewhere in Asia, Hong Kong's Hang Seng added 0.1% to 24,618.23 while the Shanghai Composite index slipped 0.1% to 3,503.78.
South Korea's Kospi lost 0.9% to 3,186.38 and in Australia, the S&P/ASX 200 declined 0.8% to 8,561.80.
Taiwan's Taiex jumped 0.9% and India's Sensex was flat. Thailand's SET also was little changed.
In Jakarta, shares rose 0.4% after President Donald Trump said on Truth Social that he plans to tariff imports from Indonesia at 19%, while American goods sent to the Southeast Asian country will face no tariffs. Trump also said Indonesia committed to buying U.S. energy, agricultural products and aircraft.
On Tuesday, the S&P 500 fell 0.4% to 6,243.76, but stayed near its all-time high set last week, as 90% of the stocks within the index fell. The Dow Jones Industrial Average dropped 1% to 44,023.29.The Nasdaq composite rose 0.2% to a record 20,677.80 thanks to Nvidia, the market's most influential stock.
Nvidia said the U.S. government has assured it that licenses will be granted for its H20 chip, used for artificial intelligence, again and that deliveries will hopefully begin soon. Its 4% gain was by far the strongest force pushing upward on the S&P 500.
Stocks of big U.S. banks were mixed following their latest profit reports. JPMorgan Chase slipped 0.7% despite reporting a stronger profit than analysts expected, as CEO Jamie Dimon warned of risks to the economy because of tariffs and other concerns.
Citigroup rose 3.7% following its better-than-expected profit report. But Wells Fargo fell 5.5% following its own, as it trimmed its forecast for an important way that it makes money.
A report showed inflation in the United States accelerated to 2.7% last month from 2.4% in May as prices rose for clothes, toys and other goods that usually are imported. Economists say prices may be rising because of stiff tariffs that President Donald Trump has proposed on other countries.
Treasury yields yo-yoed after the report and then began rising.
The yield on the 10-year Treasury climbed to 4.48% from 4.43% late Monday. The yield on the two-year Treasury, which more closely tracks expectations for what the Federal Reserve will do with short-term interest rates, rose to 3.95% from 3.90%.
Higher inflation could inhibit interest rate cuts by the Fed. It has been keeping rates on hold this year after cutting them at the end of last year.
That's because lower rates can give inflation more fuel, along with a boost for the economy. Wall Street loves lower rates because they goose prices higher for stocks and other investments, and Trump himself has been clamoring for the Fed to cut more quickly.
Fed Chair Jerome Powell, though, has been adamant that he wants to wait for more data about how tariffs affect the economy and inflation. Following Tuesday's inflation report, traders are still overwhelmingly betting that the Fed will cut its main interest rate by the end of the year.
But they pulled back their bets on the number of potential cuts, according to data from CME Group.
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Al Jazeera
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Now that countries have capitulated on tariffs, Trump will be back for more
Governments have been falling over one another to offer concessions to United States President Donald Trump as his August 1 tariff deadline looms. On Sunday, the US president scored his biggest victory to date, as European Union chief Ursula von der Leyen, like the leader of a vassal state paying homage to an emperor, travelled to Trump's private golf course in Scotland to offer him tribute. It came in the form of an entirely one-sided tariff pact in which Brussels accepted a huge tariff hike and pledged to spend hundreds of billions of dollars on US fossil fuels and military products. The pact has changed the balance between two of the largest economic powers in the world. The EU has simply rolled over without a fight. French Prime Minister Francois Bayrou described it as a 'dark day' for the union, while a European diplomat bemoaned by saying 'those who don't hang together get hanged separately.' The economic impact on the rest of the world is likely to be worse still. Trump has declared economic war on friends and foes alike. Many countries are facing higher tariffs than the EU and are less capable of defending themselves. By giving in, Brussels has made it harder for other countries to stand firm. A 40 percent tariff on Laos or 36 percent on Cambodia, for example, will be devastating to the export industries which US corporations encouraged them to build in recent decades. And without a united front, other countries are reluctantly coming to the table. Last week, Trump announced a deal with the Philippines for 19 percent tariffs on all goods exported to the US and no tariffs on imported US goods; it was unclear if Manilla had fully agreed to the arrangement before the US president made it public. Indonesia's deal is even worse, with the country forced to give up controls on its critical mineral exports and aspects of its emerging digital sector – both of which are critical to its economic development. For Brazil, US demands go beyond the economic realm, with Washington going as far as trying to interfere in the prosecution of former President Jair Bolsonaro. While the provisions of different trade deals vary, they all follow the same strategy: Bullying governments to change their rules and regulations in favour of US corporate interests, especially those of oligarchs who surround the president. Trump's trade negotiations style might be highly erratic, but his is a clear-cut end goal: To upend the world economic system, replacing rules which were already unfair with the absolute dominance of the biggest bully. The immediate impact of this restructuring will be bad for the countries that submit to it, but this won't be the end of the story. By giving Trump what he wants, they have strengthened his hand, and he will be back for more. Already, the EU has little clarity around a range of additional tariffs the US president might bring in and how they will affect the 'deal' that's been made. Canada ditched its digital services tax on Big Tech to get a deal, only to be hit by higher tariffs. The Philippines now faces a higher tariff than it did in April, despite making concessions. And the UK thought it had a deal on steel, only to discover it didn't, really. There's no fairness in any of this. The only way out is to stand up to Trump; he does not respect weakness. As a minimum, for countries that have signed a deal, that means implementing as little as they can. Governments that can retaliate should do so. That does not necessarily mean matching tariff for tariff, a policy which could inflict serious self-harm, but rather using the tools that show their strength best. The EU has ample power to challenge the US services trade, and should have retaliated by limiting US corporate access to, for example, government contracts, financial markets and intellectual property protection. In failing to take such action, the EU showed a profound misunderstanding of the moment we're in. Von der Leyen seems to think Trump is a temporary anomaly who can be contained while we wait for a resumption of business as usual in four years. But in Europe and the US, the public has had enough of a corporate-dominated global economy. There's no return to that world. Retaliatory policies like the ones mentioned above can not only maximise the pain directed at Trump's oligarchic friends, but they can also help unwind the power of the monopolies which are at the heart of our deeply unfair, unsustainable economy. This last point is important. Because if we want Trump gone, as millions of Americans do, we will not get there by handing him unnecessary victories. Trump won power by building a bridge between those angry at a corporate-dominated economy and the corporate barons themselves. It was an impressive feat. But the alliance will only last as long as he's winning. The question now is how governments can best protect their economies long-term, and that must come through regaining sovereignty, not handing it over to the bully in the White House. What's more, such action can show Trump for the corporate lobbyist he really is and lay a path to his eventual downfall. The views expressed in this article are the author's own and do not necessarily reflect Al Jazeera's editorial stance.
Al Jazeera
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The World Bank has slashed its growth forecasts for nearly 70 percent of economies – including the US, China and Europe, and six emerging market regions – and cut its global growth estimate to 2.3 percent, down from 2.7 percent in January. Oxford Economics has forecast a shallow recession in capital spending in the Group of Seven (G7) countries – Canada, France, Germany, Italy, Japan, the United Kingdom and the US – lasting from the second quarter to the third quarter of this year. 'What we're seeing is the Donald Trump business style: There's lots of commotion, lots of claim, lots of activity and lots of b*******,' Robert Rogowsky, professor of international trade at the Middlebury Institute of International Studies, told Al Jazeera. 'That's his business model, and that's how he operates. That's why he's driven so many of his businesses into bankruptcy. It's not strategic or tactical. It's instinctive.' 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Canada, for instance, is tackling inter-provincial trade barriers, a politically sensitive issue historically, even as it looks elsewhere to increase exports, said Tony Stillo, director of Canada Economics at Oxford Economics. 'It would be foolhardy not to provide to the US, seeing as it's our largest market, but it also makes us more resilient to provide to other markets as well,' Stillo told Al Jazeera. Canadian Prime Minister Mark Carney has reached out to the EU and Mexico and indicated his wish to improve his country's strained relations with China and India. This month, Canada expanded its exports of liquified natural gas beyond the US market, with its first shipment of cargoes to Asia. To mitigate the fallout of Trump's tariffs, Ottawa has been offering relief to Canadian businesses, including automakers, and has instituted a six-month pause on tariffs on some imports from the US to give firms time to re-adjust their supply chains. There is also 'some relief' in the fact that other countries 'don't seem to be imitating the Trump show [by levying their own tariffs]. They're witnessing this attempt to strong-arm the rest of the world, but it doesn't seem to be working,' Mary Lovely, the Anthony M Solomon senior fellow at the Peterson Institute for International Economics (PIIE), told Al Jazeera. But the world is watching how the tariffs will affect the US economy, as 'that will also be instructive to other countries', Lovely said. 'If we see a slowdown, as we expect, it becomes a cautionary tale for others.' Although the US stock market is near an all-time high, it is heavily weighted towards the 'magnificent seven', said Lovely, referring to the largest tech companies, and that reflects just one part of the economy. 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'But it will break because I do think Donald Trump will drive us into a recession.'
Al Jazeera
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Inmates, pregnant woman among 22 killed in Russia's attacks on Ukraine
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