Trump says U.S. has ended trade talks with Canada
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Reuters
22 minutes ago
- Reuters
Wall Street stocks outperform Europe on megacap earnings boost
NEW YORK/ LONDON, July 31 (Reuters) - Wall Street outperformed European equities on Thursday, boosted by megacap earnings reports, even as data showed signs of rising inflation and investors watched for last-minute trade deals ahead of U.S. President Donald Trump's August 1 deadline. U.S. Treasury yields briefly pared declines in choppy trading after data showed that U.S. inflation in June as tariffs on imports started raising the cost of some goods, supporting economists' expectations that price pressures would pick up in the second half of the year. The Federal Reserve kept rates steady on Wednesday, and chair Jerome Powell said that the central bank needed to wait for more data before deciding whether to adjust rates in September, drawing further criticism from Trump on Thursday. "Anybody hoping for the Fed to move more aggressively in the near term continues to be disappointed that it comes back to both the inflation and the job story. The PCE data this morning reinforced the inflation worries the Fed still has and helps explain why it's in no hurry to move at this point," said Jim Baird, Chief Investment Officer with Plante Moran Financial Advisors. But while Powell's comments had sent equities lower on Wednesday, U.S. indexes rebounded on Thursday after better-than-expected results from Microsoft (MSFT.O), opens new tab and Meta Platforms (META.O), opens new tab. "A couple of solid earnings reports last night suggest that one of the key themes that's been driving the stock market this year is still seemingly intact. You've seen a nice rebound in tech today, or nice surge in tech today. "The AI theme, the enthusiasm around the technology sector still appears to be intact. So that's a positive catalyst for the market," said Baird. On Wall Street, indexes lost some steam as the session progressed. At 11:14 a.m., the Dow Jones Industrial Average (.DJI), opens new tab fell 123.28 points, or 0.28%, to 44,338.00. The S&P 500 (.SPX), opens new tab rose 13.57 points, or 0.21%, to 6,376.47 and the Nasdaq Composite (.IXIC), opens new tab rose 119.18 points, or 0.56%, to 21,248.86, both around session lows. In Europe, however, the broad Stoxx 600 (.STOXX), opens new tab benchmark was weighed down by miners after U.S. September Comex copper futures fell 22%, the biggest decline on record, after Trump said the U.S. would impose a 50% tariff on copper pipes and wiring. The pan-European STOXX 600 (.STOXX), opens new tab index was down 0.73% while MSCI's gauge of stocks across the globe (.MIWD00000PUS), opens new tab fell 1.07 points, or 0.11%, to 933.26. Earlier, Chinese stocks also retreated after official PMI gauges showed weaker than expected economic activity in July. China's blue chip CSI 300 had ended 1.8% lower, its biggest single day drop since April 7, and Hong Kong's (.HSI), opens new tab index closed 1.6% lower. In currencies, the U.S. dollar had a mixed performance on the day. The dollar index , which measures it against a basket of currencies, including the yen and the euro, rose 0.05% to 99.83. The euro was up 0.34% at $1.1443. But against the Japanese yen , the dollar strengthened 0.59% to 150.39. The Bank of Japan held interest rates steady and increased its inflation forecast. The Korean won weakened 0.2% against the dollar to 1,395.78 per dollar after rising earlier following Trump's announcement that the U.S. would charge a 15% tariff on imports from South Korea, which would in return invest $350 billion in U.S. projects and purchase $100 billion in U.S. energy products. In Treasuries, the yield on benchmark U.S. 10-year notes fell 4.6 basis points to 4.332%, from 4.378% late on Wednesday while the 30-year bond yield fell 5.1 basis points to 4.8624%. The two-year note yield, which typically moves in step with interest rate expectations for the Federal Reserve, fell 1.9 basis points to 3.918%, from 3.937% late on Wednesday. In oil markets, prices fell after rising for the prior three sessions as investors weighed the supply risks from Trump's push for a to the war in Ukraine through more tariffs and a surprise build in U.S. crude stocks put pressure on prices. U.S. crude fell 1.71% to $68.79 a barrel and Brent fell to $72.47 per barrel, down 1.04% on the day. Gold prices rose as traders turned to the safe haven asset amid ongoing tariff uncertainty, ahead of the August 1 tariff deadline. Spot gold rose 0.63% to $3,295.33 an ounce.
The Guardian
an hour ago
- The Guardian
Trump extends deadline for tariff deal with Mexico by another 90 days
Donald Trump has extended the deadline for a tariff deal with Mexico by another 90 days, fuelling speculation he could announce pauses for dozens of other countries that face punitive higher import duties from Friday. As the countdown continues to his deadline for a trade deal – already extended by four weeks from the original 90 days – the US president said he had made the decision to offer more time to Mexico because of the complexities of the trading relationship. He wrote on social media: 'We will be talking to Mexico over the next 90 Days with the goal of signing a Trade Deal somewhere within the 90 Day period of time, or longer.' A little more than two weeks ago Trump threatened the EU and Mexico with tariffs of 30% on most exports to the US, but last Sunday he concluded a deal with Brussels with a 15% baseline rate from 1 August. Writing on his Truth Social platform, Trump said: 'I have just concluded a telephone conversation with the President of Mexico, Claudia Sheinbaum, which was very successful in that, more and more, we are getting to know and understand each other. 'The complexities of a Deal with Mexico are somewhat different than other Nations because of both the problems, and assets, of the Border. 'We have agreed to extend, for a 90 Day period, the exact same Deal as we had for the last short period of time, namely, that Mexico will continue to pay a 25% Fentanyl Tariff, 25% Tariff on Cars, and 50% Tariff on Steel, Aluminum, and Copper.' He said Mexico had agreed to 'immediately terminate its Non Tariff Trade Barriers, of which there were many' although he did not specify which. Non-tariff barriers can range from complex paperwork to trading standards and food regulations. Dozens of other countries that have not signed a trade deal with the US are facing punitive tariffs from Friday including some of the world's poorest such as Lesotho, Bangladesh and Nepal, and the world's richest including Canada and Taiwan. Agreements have only been reached with eight of the 60 countries Trump said in April he would impose punitive 'reciprocal' tariffs on in retribution for what he described as years of looting, pillaging and scavenging of the US, announcing what he called 'liberation day'. China faces a separate deadline of 12 August, with an extension agreed in principle but yet to be approved by the White House. Sign up to Business Today Get set for the working day – we'll point you to all the business news and analysis you need every morning after newsletter promotion The US Treasury secretary, Scott Bessent, said on Thursday that a deal with Beijing was 'close', while Trump claimed last week that one with Australia was not far off. Other large trading partners still in Trump's crosshairs include Brazil, which has been threatened with a 50% tariff if it does not end what Trump contends is a 'witch-hunt' agains its former president, Jair Bolsonaro; and Canada, which is facing a 35% tariff tomorrow. Earlier this week the Canadian prime minister, Mark Carney, said it was possible a trade deal might not be concluded by 1 August, but on Thursday Trump linked its chances of a deal to its position on Palestine. He took to his social media platform just after midnight Washington time to say a deal could be scuppered. 'Wow! Canada has just announced that it is backing statehood for Palestine,' he said on Truth Social. 'That will make it very hard for us to make a Trade Deal with them. Oh' Canada!!!'
The Guardian
an hour ago
- The Guardian
The Guardian view on Trump's tariffs: both a political and an economic threat
Donald Trump's 1 August tariffs deadline did what it was always intended to do. It kept the markets and the nations guessing amid last-minute uncertainty. It attempted to reassert the global heft of the United States economy to take on and master all comers. And it placed President Trump at the centre of the media story, where he always insists on being. In the event, there were some last-minute agreements struck this week, few of them fair or rational in trade terms, most of them motivated by the desire to generate some commercial order. Some conflicts are still in the balance. There were 11th-hour court challenges too, disputing the president's very right to play the trade war game in this way. Even now, no one, probably including Mr Trump himself, knows whether this is his administration's last word on US tariffs. Almost certainly not. That's because Mr Trump's love of tariffs is always more about the assertion of political clout rather than economic power. Mr Trump's antipathy towards the European Union drives one example. The pact agreed by Ursula von der Leyen in Scotland last weekend underlines that the EU's aspirations as a global economic superpower exceed its actual clout. The EU could not prevent Mr Trump making European goods 15% more expensive if they sell on US markets. Nor could it stop Mr Trump getting EU tariffs on US goods withdrawn. Equally eloquent about the global balance of economic power is that Mr Trump has not been able to force China to bend the knee in the manner of the EU. China has responded aggressively to Trump's tariff threats, retaliating with tariffs of its own and blocking the sale of commodities, including rare-earth minerals, that the US most covets. Unsurprisingly, this standoff has not produced one of Mr Trump's so-called deals. Friday's deadline has been reset for later in the month. It would be no surprise if it was eventually pushed back further. Mr Trump is not imposing tariffs on the rest of the world in order to promote global trade or even to boost the US economy. He is doing it, in part, because Congress has delegated this power to him, allowing the president to impose or waive tariffs at will. He uses this power for many purposes. These include raising government income without congressional oversight and also, because tariffs are regressive, shifting the tax burden away from the very rich, like Mr Trump himself, on to the middle and working class. But economics also comes way down the field in the list of reasons why Mr Trump is wielding the tariff weapon internationally. US talks with Brazil – with which the US runs a trade surplus, not a deficit – have been hijacked by Mr Trump's grievance over the prosecution of its former president Jair Bolsonaro for trying to overturn his 2022 election defeat. Talks with India are deadlocked because Mr Trump wants to penalise Delhi for buying energy and weapons from Russia. Those with Canada have been hit by Mr Trump's objections to Ottawa's plan to recognise Palestine. The ultimate test of the policy, however, will indeed be economic. For now, financial markets appear to have decided that Mr Trump's tariffs are manageable. If tariffs now raise the cost of goods on US high streets, slowing growth and feeding inflation, as they may, the wider market response could change quickly. In that event, the mood among American voters might even shift too.
