Global stocks mostly rise on trade deal hopes while Tesla plummets
NEW YORK : Stock markets mostly bumped upwards Thursday as hopes grew that the European Union could strike a trade deal with the United States, while Tesla shares nosedived on poor earnings results.
Investors have profited in recent weeks from wagers that governments will eventually hammer out pacts with Donald Trump ahead of the US president's looming August 1 deadline to avoid steeper levies.
'Buyers are in control and there remains a lot of optimism about future trade deals,' said Adam Sarhan of 50 Park Investments.
'For now the market is choosing to look at the bullish side of the coin,' he said. 'Not the bearish side and not the neutral side.'
On Wall Street, both the S&P 500 and tech-heavy Nasdaq edged higher to close at fresh records, while the Dow retreated.
Google parent Alphabet climbed 0.9% after reporting a whopping US$28.2 billion in second-quarter profits as it touted its artificial intelligence offerings.
But Tesla fell 8.2% as CEO Elon Musk warned investors of a rough patch for earnings after the electric car maker reported a 16% drop in quarterly profits.
A survey of US manufacturers released Thursday showed business confidence in the world's top economy also deteriorated in July for the second month running.
'Companies cite ongoing concerns over the impact of government policies, notably in terms of both tariffs and cuts to federal spending,' said Chris Williamson, chief business economist at S&P Global Market Intelligence.
In Europe, London's FTSE 100 gained 0.9% at the close, lifted by a stream of robust earnings, including from consumer goods group Reckitt, mobile phone giant Vodafone and Lloyds bank.
Paris fell, dragged down by a drop in luxury stocks and disappointing profits from fossil fuel giant TotalEnergies.
Yet most other European stocks markets including Frankfurt rose, as the European Union and Washington appeared close to a deal that would halve a threatened 30% levy on EU goods to 15%.
A European Commission spokesman said Thursday that he believed a trade deal with the US is 'within reach.'
According to multiple diplomats, the deal could waive tariffs on aircraft, lumber, pharmaceutical products and agricultural goods.
The bloc, however, is still forging ahead with contingency plans in case talks fail, with member states approving a €93 billion (US$109-billion) package of counter-tariffs on US goods.
Meanwhile, the European Central Bank left interest rates unchanged, as widely expected.
It warned that the economic environment remained 'exceptionally uncertain, especially because of trade disputes' as higher US tariffs hang in the balance.
The euro dipped a touch following Thursday's rate decision, but it did perk up after ECB President Christine Lagarde said the central bank was monitoring the dollar-euro exchange rate but had no target.
The euro has surged almost 14% against the dollar since the start of the year, boosted by investors dumping US assets in the face of Trump's erratic policymaking and attacks on the US Federal Reserve.
The euro's appreciation helps contain inflation but could harm European exports and thus slow already sluggish economic growth.
In Asia, stocks advanced with Tokyo adding more than one percent, building on a more than three percent surge Wednesday on the back of the Japan-US trade deal.
Hong Kong and Shanghai also rose.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Star
2 hours ago
- The Star
World economies reel from Trump's tariffs punch
ASIA/SOUTH-EAST ASIA (AFP): Global markets reeled at the weekend after President Donald Trump's tariffs barrage against nearly all US trading partners as governments looked down the barrel of a seven-day deadline before higher duties take effect. Trump announced late Thursday that dozens of economies, including the European Union, will face new tariff rates of between 10 and 41 per cent. However, implementation will be on August 7 rather than Friday as previously announced, the White House said. This gives governments a window to rush to strike deals with Washington setting more favorable conditions. Neighboring Canada, one of the biggest US trade partners, was hit with 35 percent levies, up from 25 percent, effective Friday -- but with wide-ranging, current exemptions remaining in place. The tariffs are a demonstration of raw economic power that Trump sees putting US exporters in a stronger position, while encouraging domestic manufacturing by keeping out foreign imports. But the muscular approach has raised fears of inflation and other economic fallout in the world's biggest economy. Stock markets in Hong Kong, London and New York slumped as they digested the turmoil, while weak US employment data added to worries. Trump's actions come as debate rages over how best to steer the US economy, with the Federal Reserve this week deciding to keep interest rates unchanged, despite massive political pressure from the White House to cut. Data Friday showed US job growth missing expectations for July, while unemployment ticked up to 4.2 percent from 4.1 percent. On Wall Street, the S&P 500 dropped 1.6 percent, while the Nasdaq tumbled 2.2 percent. - Political goals - Trump raised duties on around 70 economies, from a current 10 percent level imposed in April when he unleashed "reciprocal" tariffs citing unfair trade practices. The new, steeper levels listed in an executive order vary by trading partner. Any goods "transshipped" through other jurisdictions to avoid US duties would be hit with an additional 40 percent tariff, the order said. But Trump's duties also have a distinctly political flavor, with the president using separate tariffs to pressure Brazil to drop the trial of his far-right ally, former president Jair Bolsonaro. He also warned of trade consequences for Canada, which faces a different set of duties, after Prime Minister Mark Carney announced plans to recognize a Palestinian state at the UN General Assembly in September. In targeting Canada, the White House cited its failure to "cooperate in curbing the ongoing flood of fentanyl and other illicit drugs" -- although Canada is not a major source of illegal narcotics. By contrast, Trump gave more time to Mexico, delaying for 90 days a threat to increase its tariffs from 25 percent to 30 percent. But exemptions remain for a wide range of Canadian and Mexican goods entering the United States under an existing North American trade pact. Carney said his government was "disappointed" with the latest rates hike but noted that with exclusions the US average tariff on Canadian goods remains one of the lowest among US trading partners. - 'Tears up' rule book - With questions hanging over the effectiveness of bilateral trade deals struck -- including with the EU and Japan -- the outcome of Trump's overall plan remains uncertain. "No doubt about it -- the executive order and related agreements concluded over the past few months tears up the trade rule book that has governed international trade since World War II," said Wendy Cutler, senior vice president of the Asia Society Policy Institute. On Friday, Trump said he would consider distributing a tariff "dividend" to Americans. Notably excluded from Friday's drama was China, which is in the midst of negotiations with the United States. Washington and Beijing at one point brought tit-for-tat tariffs to triple-digit levels, but have agreed to temporarily lower these duties and are working to extend their truce. Those who managed to strike deals with Washington to avert steeper threatened levies included Vietnam, Japan, Indonesia, the Philippines, South Korea and the European Union. Among other tariff levels adjusted in Trump's latest order, Switzerland now faces a higher 39 per cent duty. - AFP
Malay Mail
3 hours ago
- Malay Mail
Biofuel battle: Why India is shielding its farmers in the face of US trade pressure
MUMBAI, Aug 3 — US President Donald Trump on Thursday slapped a 25 per cent tariff on Indian goods after prolonged talks that got bogged down over access to India's labour-intensive agricultural sector, which New Delhi has pledged to protect. Why is India opposing the products the US is lobbying for? The United States is pressing India to open its markets to a wide range of American products, including dairy, poultry, corn, soybeans, rice, wheat, ethanol, fruits and nuts. While India is willing to provide greater access for US dry fruits and apples, it is holding back on corn, soybeans, wheat, and dairy products. A key reason for this resistance is that most US corn and soybeans are genetically modified (GM), and India does not permit the import of GM food crops. GM crops are widely perceived in India as harmful to human health and the environment, and several groups affiliated with Prime Minister Narendra Modi's ruling Bharatiya Janata Party (BJP) are opposing their introduction. The commercial cultivation of a high-yielding GM mustard variety that India developed itself is currently not allowed due to an ongoing legal battle. Like GM crops, dairy is also a highly sensitive issue, as it provides a livelihood for millions of farmers, including many who are landless or smallholders. The dairy industry helps sustain farmers even during erratic monsoon seasons, which can cause significant fluctuations in crop production. In India, where a large proportion of the population is vegetarian, food choices are strongly influenced by cultural and dietary preferences. Indian consumers are particularly concerned that cattle in the US are often fed animal by-products — a practice that conflicts with Indian food habits. A farmer sprinkles fertiliser in a paddy field on the outskirts of Amritsar on July 5, 2025. — AFP pic Why are agricultural imports politically charged? India is self-sufficient in most farm goods, with the exception of vegetable oils. After liberalising cooking oil imports over three decades ago, the country now has to import nearly two-thirds of its supply to meet demand. India does not want to repeat this mistake with other basic foods, which account for nearly half of its consumer price index. Though agriculture makes up just 16 per cent of India's nearly US$3.9 trillion economy, it is the lifeblood for nearly half the country's 1.4 billion people. Four years ago, this powerful voting bloc forced Modi's government into a rare retreat on a set of controversial farm laws. Some in power fear a flood of cheaper US imports would bring down local prices and hand opposition parties an opportunity to sharpen its attack on the government. New Delhi is also worried that a trade deal with the US could also force it to open its agricultural sector to other countries. Farmers work in an onion farm near power-generating windmill turbines of Adani Green Energy at Ahmedabad-Narayan Sarovar state highway near Nakhatrana village in the western state of Gujarat November 29, 2024. — Reuters pic How does farming in India and the US differ? The vast disparity in the scale of farming makes it difficult for Indian farmers to compete with their US counterparts. The average Indian farm is 1.08 hectares, compared to 187 hectares in the US For dairy farmers, the difference is even more dramatic — a small herd of two or three animals versus hundreds or more in the US Many Indian farmers also rely on traditional, unmechanised techniques, while American agriculture has developed into a highly efficient, tech-driven industry. Why is India hesitant to use US ethanol in its biofuel programme? One of India's key goals with its Ethanol Blended Petrol (EBP) programme is to reduce energy imports and support domestic farmers by using sugarcane and corn for biofuel production. Indian companies have invested heavily in new distilleries, and farmers have expanded corn cultivation to meet the rising demand. India recently achieved its ambitious target of a 20 per cent ethanol blend in petrol. With state assembly elections approaching in Bihar — a major corn-producing state in the east — allowing US ethanol imports would lower local corn prices. This would probably anger farmers and turn them against the BJP ahead of the election and also undermine the growing distillery sector. — Reuters
The Sun
9 hours ago
- The Sun
Sabah's deep-sea seafood port to boost economy with RM1.8 billion annually
KOTA KINABALU: The development of a European Union-standard deep-sea seafood port in Kota Kinabalu is projected to contribute RM1.8 billion annually to Sabah's economy. Chief Minister Datuk Seri Hajiji Noor highlighted this as a high-impact strategic investment in the Blue Economy sector. A total of RM360 million has been committed by the state government and local partners. The port is expected to handle 50,000 tonnes of tuna yearly. It aims to elevate Sabah's role in the deep-sea fishing industry. Hajiji shared these details during the closing ceremony of the National Farmers, Breeders, and Fishermen Day (HPPNK) 2025. The event was attended by Prime Minister Datuk Seri Anwar Ibrahim and key agriculture officials. Hajiji also noted the revival of the Sabah Paddy and Rice Board in 2024, which was dissolved in 1981. This move is seen as a step toward boosting rice self-sufficiency. The state targets a 30% self-sufficiency level (SSL) by 2026 and 60% by 2030. These targets align with federal agricultural priorities. Agriculture contributes RM12.2 billion to Sabah's GDP, making up 14.5% of the total. This has prompted the state to adopt modern technologies like IoT and smart farming. These innovations aim to enhance efficiency, productivity, and youth participation in the sector. Sabah's 15 permanent food production parks have already yielded over 1,494 tonnes of produce. This has generated RM4.32 million in returns. – Bernama
