Wall Street futures fall as Middle East tensions rise; Boeing drops
Shares of planemaker Boeing lost 7.6 per cent premarket after an Air India aircraft with more than 200 people crashed in India's western city of Ahmedabad, and aviation tracking site Flightradar24 said the plane was a Boeing 787-8 Dreamliner.
Underscoring increased volatility in the Middle East, President Donald Trump said on Wednesday US personnel were being moved out of the region as it could be a "dangerous place" and the United States would not allow Iran to have a nuclear weapon.
This came just days ahead of a planned sixth round of nuclear talks between the two countries. A senior Iranian official said on Wednesday Tehran will strike US bases in the region if nuclear negotiations fail and conflict arises.
China on Thursday affirmed a trade deal with the US, strengthening a delicate truce in the trade war that has roiled global markets for much of the year.
"Now that a consensus has been reached, both sides should abide by it," Lin Jian, a foreign ministry spokesperson for China, said at a regular news conference.
Traders also looked to gain more details on the trade framework discussed by officials from both sides at a two-day talk in London earlier this week.
At 06:48 am ET, Dow E-minis were down 269 points, or 0.63 per cent, S&P 500 E-minis were down 25.5 points, or 0.42 per cent, and Nasdaq 100 E-minis were down 74 points, or 0.34 per cent.
Tesla shares lost 1.7 per cent and Nvidia declined about 1.1 per cent.
Among other movers, Oracle shares rose 7.7 per cent after the cloud service provider raised its annual revenue growth forecast citing increased demand from companies deploying artificial intelligence.
US-listed shares of gold miners also advanced, as bullion prices hit a one-week high.
Newmont gained 1.5 per cent, Harmony Gold was up 3.5 per cent and AngloGold Ashanti rose 4.2 per cent.
Shares of Oklo fell 5.8 per cent after the nuclear technology firm backed by Sam Altman launched a $400 million stock offering.
After a tame inflation report on Wednesday that provided investors with some reprieve, focus will now be on the May Producer Price Index data, which is due at 8:30 am ET, along with initial jobless claims data.
"May could be too soon to see the impact of tariffs, but softer demand may also be limiting pass through. We pencil in larger tariff effects starting later in the summer," said Citigroup strategists in a client note.
With investor bets increasing on Trump reaching favourable trade agreements with several trading partners in the coming weeks, the benchmark S&P 500 index is trading 2 per cent below its record high touched in February. The tech-heavy Nasdaq is about 2.7 per cent from record levels hit in December. — Reuters
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Observer
6 hours ago
- Observer
Markets rise as Trump sends tariff letters, delays deadline
Hong Kong: Stocks rose Tuesday as traders cautiously welcomed Donald Trump's extension of his tariff deadline and indication he could push it back further, though uncertainty over US trade policy capped gains. Days before the three-month pause on his "Liberation Day" tariffs was set to expire, the US president said he would give governments an extra three weeks to hammer out deals to avoid paying sky-high levies for exports to the world's biggest economy. That came as he sent out letters to more than a dozen countries -- including top trading partners Japan and South Korea -- setting out what he had decided to charge if they did not reach agreements by the new August 1 target date. Investors tentatively welcomed the delay amid hopes officials will be able to reach deals with Washington, with some observers seeing the latest move by the president as a negotiation tactic. The letters said Japan and South Korea would be hit with 25 percent tariffs, while Indonesia, Bangladesh, Thailand, South Africa and Malaysia faced duties ranging from 25 percent to 40 percent. When asked if the new deadline was set in stone, the president said: "I would say firm, but not 100 percent firm." And asked whether the letters were his final offer, he replied: "I would say final -- but if they call with a different offer, and I like it, then we'll do it." While Wall Street's three main indexes ended down -- with the S&P 500 and Nasdaq back from record highs -- Asian markets mostly rose. Tokyo and Seoul advanced, while there were also gains in Hong Kong, Shanghai, Wellington, Manila, Jakarta, Mumbai and Singapore. London and Frankfurt all rose at the open, though Paris was flat. The White House has for weeks said that numerous deals were in the pipeline, with Treasury Secretary Scott Bessent claiming Monday that "we are going to have several announcements in the next 48 hours". But so far only two have been finalised, with Vietnam and Britain, while China reached a framework to slash eye-watering tit-for-tat levies. Asia Society Policy Institute vice president Wendy Cutler said the levies on Japan and South Korea "will send a chilling message to others". "Both have been close partners on economic security matters," she said, adding that companies from both countries had made "significant manufacturing investments in the US in recent years". For his part, Japan's Prime Minister Shigeru Ishiba said Sunday that he "won't easily compromise". National Australia Bank's Tapas Strickland said there remained a lot of uncertainty among investors. "If the agreement with Vietnam is anything to go by, then countries... the US has a trade deficit with look destined to have a 20 percent tariff, and those... the US has a trade surplus with a 10 percent tariff," he wrote in a commentary. "That could mean eventual tariff rates settle higher than what the current consensus is, which is broadly for a 10 percent across the board tariff with a higher tariff on China. "Without further clarity, though, markets will have trouble pricing these different scenarios, especially given Trump's quick reversal following the market reaction in response to the initial Liberation Day tariffs." - Key figures at around 0810 GMT - Tokyo - Nikkei 225: UP 0.3 percent at 39,688.81 (close) Hong Kong - Hang Seng Index: UP 1.1 percent at 24,148.07 (close) Shanghai - Composite: UP 0.7 percent at 3,497.48 (close) London - FTSE 100: UP 0.1 percent at 8,814.50 Euro/dollar: UP at $1.1765 from $1.1710 on Monday Pound/dollar: UP at $1.3646 from $1.3602 Dollar/yen: DOWN at 146.03 yen from 146.13 yen Euro/pound: UP at 86.20 pence from 86.09 pence West Texas Intermediate: DOWN 0.3 percent at $67.76 per barrel Brent North Sea Crude: DOWN 0.1 percent at $69.52 per barrel New York - Dow: DOWN 0.9 percent at 44,406.36 (close) .
Observer
8 hours ago
- Observer
Trump revives trade war, threatening steep tariffs on allies
WASHINGTON — President Donald Trump revived his trade war threat with more than a dozen countries on Monday, telling them that they would face steep tariffs on their exports as of Aug. 1 unless they agreed to trade deals by then. The president targeted two of America's closest foreign allies, Japan and South Korea, as well as Malaysia, Indonesia, and South Africa. Trump also officially extended the timeline for dozens of other countries to agree to deals with the United States or face tariffs, signing an executive order Monday afternoon delaying the stiff levies that were supposed to snap back Wednesday. Markets dropped as investors assessed the prospect of more trade conflict with some of America's closest allies and largest trading partners. The S&P 500 ended Monday down 0.8%. Other major indexes also fell. In nearly identical letters to the president of South Korea and the prime minister of Japan, Trump wrote that the countries would face a 25% tax on their exports next month, adding that 'we have decided to move forward with you, but only with more balanced, and fair, TRADE.' 'Please understand that the 25 percent number is far less than what is needed to eliminate the trade deficit disparity we have with your country,' he wrote. A few hours later, Trump posted several more letters to social media detailing tariff rates that products from other foreign countries would face: 40% for exports from Myanmar and Laos, 30% for exports from South Africa, and 25% for exports from Malaysia. He quickly followed with new tariff rates for Thailand, Bangladesh, Indonesia, and other countries. Trump announced a 10% 'baseline' tariff on all U.S. imports in April, as well as higher tariffs on goods from about 60 countries. After that announcement threw stock and bond markets into turmoil, the president temporarily paused the tariffs, urging countries to strike trade deals with the United States instead. Countries were given until Tuesday to strike a deal, with the tariffs going into effect on Wednesday. Trump's decision to extend that deadline until Aug. 1 will give countries more time to reach agreements, but the timeline is still far more compressed than what is typical for a single trade deal, let alone dozens of them. Karoline Leavitt, the White House press secretary, said in a briefing Monday that the president was making progress on reaching agreements, and that his phone was ringing 'off the hook from world leaders all the time who are begging him to come to a deal.' Administration officials have indicated that Trump will announce some type of trade agreement with several countries this week. The United States has been nearing an initial trade framework with India, and officials from the European Union have also seemed increasingly confident that they will be able to reach an arrangement to avoid tariffs. Other countries — including Pakistan, Taiwan, and Switzerland — have also been angling for trade deals. Countries that have so far agreed to trade arrangements, even preliminary handshake agreements, have qualified for lower tariff rates than those Trump threatened them with in April. So far, the United States has reached only two preliminary trade deals, with Britain and Vietnam, and both are scant on details. For the U.S. deal with Vietnam, neither country has put out documents clarifying what, if anything, was agreed to. Both Japan and South Korea are close American allies, but negotiations with them have been proceeding more slowly than U.S. officials want. That is in part because Japan and South Korea have been having their elections, and because Trump is still imposing or threatening other tariffs on their major exports, including cars, steel, and electronics. The Japanese and Korean governments have been hesitant to offer Trump concessions while still being hit with high levies on some of their most important industries. About half of Japanese and Korean exports to the United States could be covered by other tariffs Trump has imposed or is planning to introduce on critical industries, including cars, electronics, steel, and pharmaceuticals, according to calculations by Capital Economics. Last year, the United States imported 1.5 million passenger cars and light trucks from South Korea and 1.4 million from Japan. The countries are the No. 2 and No. 3 sources of auto imports for the United States after Mexico. Wendy Cutler, a vice president of the Asia Society Policy Institute, said that both Japan and Korea were close partners on economic security matters and cooperated in industries like shipbuilding, semiconductors, critical minerals, and energy. Companies from both countries have made significant manufacturing investments in the United States in recent years, and both countries are important markets for U.S. businesses, including beef, pork, medical devices, and planes, she said. The threat of tariffs has particularly galled Japan and South Korea because Trump negotiated and signed trade deals with both countries in his first term. The first Trump administration updated the United States-Korea Free Trade Agreement, which went into force in 2012. Cutler said that because the United States already had a free-trade agreement with South Korea, 'almost all of Korea's tariffs are at zero for U.S. imports, leaving them with less to offer the United States than India or Vietnam with high tariffs.' Trump also negotiated and signed a limited trade deal with Japan in 2019, which opened Japanese markets to some U.S. agriculture and established guidelines for the tech industry. Japanese officials have extended the United States a number of trade offers, including one pledging to buy more American energy products and defense equipment and to help the United States in areas like shipbuilding. But negotiations with Japan stumbled over two main issues: that Japan was exporting far more automobiles to the United States than it imports, and that the Japanese rice market remained relatively closed to American exporters. In a social media post last week, Trump called Japan 'spoiled' and said the United States would be informing it of its new tariff rates. Jake Colvin, president of the National Foreign Trade Council, which represents international businesses, said America's trading partners were facing an uncertain return for lowering their trade barriers. While countries that have struck agreements have had their tariffs pared back somewhat, no country has secured tariffs lower than 10%. 'If what they get in return is the U.S. permanently raising its tariff rate from whatever it was in 2024 to 10%,' Colvin said, 'it's going to be hard for some of our trading partners to swallow, and it could be politically perilous for them back home with their domestic constituents.' Economists said the extension of the July deadline would continue to feed the uncertainty that businesses and consumers have been grappling with for months now. The frequent policy changes have led many businesses to put hiring and investment plans on hold. 'Overall, we're still seeing it as a prolongation of the uncertainty,' said Sarah House, an economist at Wells Fargo. 'There's still a lot to be desired in terms of details.' This article originally appeared in
Observer
8 hours ago
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Israel stalls truce talks on aid entry
CAIRO: Israel's refusal to allow the free and safe entry of humanitarian aid into Gaza remains the main obstacle to progress in the ceasefire talks being held in Qatar, Palestinian sources said on Monday. The two sources said mediators hosted one indirect round of ceasefire talks between the Palestinian group Hamas and Israeli officials earlier on Monday. Israeli Prime Minister Benjamin Netanyahu is due to meet with US President Donald Trump at the White House on Monday. Trump said on Sunday there was a good chance such a deal could be reached this week. Meanwhile, a proposal seen by Reuters and bearing the name of a controversial US-backed aid group described a plan to build large-scale camps called "Humanitarian Transit Areas' inside - and possibly outside - Gaza to house the Palestinian population, outlining a vision of "replacing Hamas' control over the population in Gaza." The $2 billion plan, created sometime after February 11 and carrying the name of the US-backed Gaza Humanitarian Foundation, or GHF, was submitted to the Trump administration, according to two sources, one of whom said it was recently discussed in the White House. The plan, reviewed by Reuters, describes the camps as "large-scale" and "voluntary" places where the Gazan population could "temporarily reside, deradicalise, re-integrate and prepare to relocate if they wish to do so.' The Washington Post made a reference to GHF's plans to build housing compounds for Palestinian non-combatants in May. A slide deck seen by Reuters goes into granular detail on the "Humanitarian Transit Zones," including how they would be implemented and what they would cost. It calls for using the sprawling facilities to "gain trust with the local population" and to facilitate US President Donald Trump's "vision for Gaza." Reuters could not independently determine the status of the plan, who created and submitted it, or whether it is still under consideration. The aid group, responding to questions from Reuters, denied that it had submitted a proposal and said the slides "are not a GHF document." GHF said it had studied "a range of theoretical options to safely deliver aid in Gaza," but that it "is not planning for or implementing Humanitarian Transit Areas (HTAs)." Rather, the organisation said it is solely focused on food distribution in Gaza. On February 4, Trump first publicly said that the US should "take over" the war-battered enclave and rebuild it as "the Riviera of the Middle East" after resettling the population of 2.3 million Palestinians elsewhere. SEE ALSO P6
