Stocks, Dollar Drop As Tariff Talk Dominates
Traders digested news also of Congress narrowly passing US President Donald Trump's signature tax and spending bill that analysts argue risks ballooning national debt and wider inflation.
On tariffs, Trump said he planned to start sending letters informing trading partners of their import levies as soon as Friday, as negotiations to avoid higher US rates entered the final stretch.
European stock markets retreated around midday, also as China said it will impose "anti-dumping" taxes of up to 34.9 percent on cognac and other brandy imported from the European Union starting from Saturday.
Asian stock markets closed out the week mixed.
Oil prices extended losses, with OPEC and the cartel's crude-producing allies expected this weekend to announce a rise to output.
The main focus heading into next week was on Trump's tariff plans.
"We draw ever closer to Wednesday's reciprocal tariff deadline, and thus traders are likely to grow jittery despite the tentative signals of a potential pathway to a deal," noted Joshua Mahony, chief market analyst at Rostro trading group.
Governments around the world have fought to hammer out tariff deals with Washington after Trump unveiled a blitz of levies in early April.
He and his top officials have said several were in the pipeline, but only Britain and Vietnam have signed pacts.
China has agreed to a framework for it and the United States to slash tit-for-tat tolls and ship certain products.
The prospect that trading partners from Japan and South Korea to India and Taiwan could be hit with stiff tariffs fuelled fresh worries about the global economy.
Uncertainty leading up to next week's cut-off tempered the positive lead from another record Thursday on Wall Street, where a forecast-busting US jobs report soothed worries about the world's top economy.
It dented the prospect of the Federal Reserve cutting interest rates at its July policy meeting, with bets now on two reductions before the end of the year -- the first likely in September.
However, analysts suggested that all was not what it seemed, pointing to softness in the private sector.
"We think that private-sector hiring has stalled, and we may see sporadic layoffs in some industries in the coming months," warned analysts at Japanese financial group MUFG.
"Despite the unemployment rate having fallen... the flow of potential workers that remained out of the labour force rose sharply in June, further highlighting the weak hiring environment.
"We continue to view labour demand as being fundamentally weak relative to the past several years," they added.
Wall Street will be closed on Friday for the US Independence Day holiday.
London - FTSE 100: DOWN 0.3 percent at 8,797.25 points
Paris - CAC 40: DOWN 0.8 percent at 7,690.02
Frankfurt - DAX: DOWN 0.6 percent at 23,784.66
Tokyo - Nikkei 225: UP 0.1 percent at 39,810.88 (close)
Hong Kong - Hang Seng Index: DOWN 0.6 percent at 23,916.06 (close)
Shanghai - Composite: UP 0.3 percent at 3,472.32 (close)
New York - S&P 500: UP 0.8 percent at 6,279.35 (close)
Euro/dollar: UP at $1.1778 from $1.1755 on Thursday
Pound/dollar: UP at $1.3651 from $1.3642
Dollar/yen: DOWN at 144.37 yen from 145.06 yen
West Texas Intermediate: DOWN 0.9 percent at $66.40 per barrel
Brent North Sea Crude: DOWN 0.9 percent at $68.19 per barrel
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Int'l Business Times
6 hours ago
- Int'l Business Times
Eight OPEC+ Alliance Members Move Toward Output Hike At Meeting
Saudi Arabia, Russia and six other key members of the OPEC+ alliance will discuss crude production on Saturday, with analysts expecting the latest in a series of output hikes for August. The wider OPEC+ group -- comprising the 12-nation Organization of the Petroleum Exporting Countries (OPEC) and its allies -- began output cuts in 2022 in a bid to prop up prices. But in a policy shift, eight alliance members spearheaded by Saudi Arabia surprised markets by announcing they would significantly raise production from May, sending oil prices plummeting. Oil prices have been hovering around a low $65-$70 per barrel. Representatives of Saudi Arabia, Russia, Iraq, United Arab Emirates, Kuwait, Kazakhstan, Algeria and Oman will take part in Saturday's meeting, expected to be held by video. Analysts expect the so-called "Voluntary Eight" (V8) nations to decide on another output increase of 411,000 barrels per day (bpd) -- the same target approved for May, June and July. The group has placed an "increased focus on regaining market shares over price stability," said Saxo Bank analyst Ole Hansen. The group will likely justify its decision by officially referring to "low inventories and solid demand as reasons for the faster unwind of the production cuts", UBS analyst Giovanni Staunovo told AFP. But the failure of some OPEC member countries, such as Kazakhstan and Iraq, to stick to their output quotas, is "a factor supporting the decision", he added. By approving another output hike, heavyweight Saudi Arabia might seek to up pressure on members for not keeping to agreed quotas via slashing expected oil profits due to lower prices. According to Jorge Leon, an analyst at Rystad Energy, an output hike of 411,000 bpd will translate into "around 250,000 or 300,000" actual barrels. An estimate by Bloomberg showed that the alliance's production increased by only 200,000 bpd in May, despite doubling the quotas. Analysts expect no major effect on current oil prices, as another output hike is widely anticipated. The meeting comes after a 12-day conflict between Iran and Israel, which briefly sent prices above $80 a barrel amid concerns over a possible closing of the strategic Strait of Hormuz, a chokepoint for about one-fifth of the world's oil supply. As fears of a wider Middle East conflict have eased, and given there "were no supply disruptions so far", the war is "unlikely to impact the decision" of the alliance, Staunovo added. The Israel-Iran conflict "if anything supports a continued rapid production increase in the unlikely event Iran's ability to produce and export get disrupted," Hansen told AFP.
DW
8 hours ago
- DW
Trump signs 'Big Beautiful Bill' into law – DW – 07/05/2025
The signature policy enacts key parts of Donald Trump's agenda and could cement his second-term legacy. US President Donald Trump signed a sweeping tax and spending bill into law on Friday, a day after Congress narrowly passed it. It makes his 2017 tax cuts permanent, slashes federal spending on federal safety-net programs, and funds a major expansion of border security and defense. "I've never seen people so happy in our country because of that, because so many different groups of people are being taken care of: the military, civilians of all types, jobs of all types," Trump said at the signing ceremony during a Fourth of July picnic at the White House. It passed the House by just four votes, with nearly all Democrats and two Republicans opposing over concerns about health care cuts and a projected $3 trillion (€2.5 trillion) increase to the national debt. After a hard-fought legislative process, Trump achieved his goal of signing the signature policy bill on US Independence Day. "America's winning, winning, winning like never before," Trump said. He thanked the Republican lawmakers who helped pass the bill in Congress, especially House Speaker Mike Johnson who was on hand to witness the signing. The bill, dubbed the "One Big Beautiful Bill Act," calls for tax breaks and increases in defense spending and immigration enforcement. "So you have the biggest tax cut, the biggest spending cut, the largest border security investment in American history," Trump said. At the same time, it will shrink the federal food assistance program and force through the largest cuts to the Medicaid health insurance scheme for low-income Americans since its 1960s launch. According to some estimates, up to 17 million people could lose their insurance coverage under the bill. Analysis by the nonpartisan Congressional Budget Office also suggests it will add more than $3 trillion to the nation's $36.2 trillion debt. Democratic National Committee Chair Ken Martin said in a statement that Trump's signature on the legislation "sealed the fate of the Republican Party, cementing them as the party for billionaires and special interests — not working families." He predicted the law would cost Republicans votes in next year's congressional elections in 2026. "This legislation will hang around the necks of the GOP for years to come," he said. Democrats are rolling out an ambitious campaign of rallies, voter registration drives, attack ads, bus tours, and even a multiday vigil, aimed at spotlighting the most controversial aspects of the legislation. "This was a full betrayal of the American people," Martin said. To view this video please enable JavaScript, and consider upgrading to a web browser that supports HTML5 video
Int'l Business Times
11 hours ago
- Int'l Business Times
US Readies New Tariffs While July 4 Costs Surge For Families And Firms
As Americans fire up their grills and gather for fireworks this Independence Day, a new economic flashpoint looms: a fresh wave of tariffs that could take effect in less than a month. With official notifications expected to go out as early as July 5, concerns are mounting over how the rising cost of imports may impact small businesses and everyday consumers. The tariff strategy—announced by former President Donald Trump—is expected to impose levies ranging from 10% to 70% on goods from countries without existing bilateral trade deals. These measures could be implemented by Aug. 1, according to CBS News. The move marks the expiration of a 90-day pause following April's unilateral tariff threats. Fireworks Industry Feels the Fuse Burning For an industry synonymous with July 4, the fireworks business is in a bind. Roughly 95% of consumer fireworks are imported from China, and importers say recent tariff policy changes have created serious disruptions in supply and pricing. "We're seeing costs that have doubled in some categories over the last three years," said Julie Heckman, executive director of the American Pyrotechnics Association, in an interview with CBS News. Retailers are reporting higher costs per container, which have not fully stabilized since earlier tariff rounds that peaked at 145%. As reported by Business Insider, wholesalers like Indiana-based distributor Bob Hamilton said he secured extra inventory early, but warns that "margins are being eaten alive" by unpredictable import costs. The Cookout Crunch: Families Paying More for Fourth of July Basics This year's holiday cookouts are also costing more. According to Axios, the average cost of July 4 cookout staples—like beef, buns, soda, and condiments—has jumped 12.7% year-over-year. Items like hamburger meat and ice cream are among the steepest climbers, as import-linked ingredients and packaging materials face cost pressure. An Axios/Ipsos poll found 32% of Americans are opting for cheaper food options—like pizza or store-brand hot dogs—rather than hosting traditional barbecues. Economist Natalie Ortega of the National Retail Federation told Axios the inflation isn't isolated: "It's not just food—it's grills, folding chairs, decorations. Tariffs are driving up the cost of celebration." Small Businesses Caught in the Middle For small businesses, especially those relying on international supply chains, the pressure is mounting. According to a recent CBS MoneyWatch report, more than 30% of small firms say they've raised prices due to tariff-related costs, while others fear closure if current trade uncertainty continues. Shayai Lucero, owner of Earth & Sky Floral Designs in New Mexico, described her struggle to keep costs manageable. "Roses that used to cost under a dollar are now close to $2.50," she told CBS News. "We can't eat those costs forever." Trade groups have echoed these concerns. In comments cited by Financial Times, the U.S. Chamber of Commerce warned that business sentiment could weaken further if tariff escalation continues without diplomatic resolution. A Political Playbook or Economic Gamble? While the administration frames the move as reclaiming "economic independence," analysts are skeptical. Julia Sutherland, a policy analyst at the Brookings Institution, told CBS News that "tariffs are regressive taxes. They hit working families long before they touch corporations." Further analysis from Goldman Sachs and J.P. Morgan suggests the U.S. tariff burden is climbing toward 13%—levels not seen since the pre-WWII Smoot-Hawley era. Experts caution this could raise consumer prices into Q3 and chill capital expenditure among small manufacturers. What to Watch Next July 5: Official tariff letters expected to go out to U.S. trade partners. July 9: Deadline for the 90-day tariff pause to expire. August 1: Full implementation of new tariffs anticipated. Global reactions could follow. India has floated WTO action, while the EU and China are weighing possible retaliatory tariffs. Meanwhile, U.S. families are adjusting to holiday inflation. As noted by AP News, even sales of essentials like soft drinks and paper goods have dipped in lower-income households, which are disproportionately affected by price volatility. Final Thought While July 4 remains a day to celebrate American independence, 2025's edition offers a deeper reflection: What does economic independence mean when it comes at a rising cost to small businesses and families? As the country watches fireworks, many on Main Street are watching price tags—and wondering what the rest of the summer will bring.
