Wall Street Ends Mixed Amid Trump's New Tariff Deadlines
The S&P 500 slipped 0.1% a day after posting its biggest loss since mid-June. The benchmark index remains near its all-time high set last week.
The Dow Jones Industrial Average gave back 0.4%. The Nasdaq composite eked out a gain of less than 0.1%, staying near its own record high.
The sluggish trading came as the market was coming off a broad sell-off following the Trump administration's decision to impose new import tariffs set to go into effect next month on more than a dozen nations.
Still, the modest pullback in the markets is a sign that Wall Street may be betting that the U.S. and its trading partners may eventually negotiate deals that will reduce or eliminate the need for punishing tariffs, said Ross Mayfield, investment strategist at Baird.
'I think today you're basically seeing a market that doesn't quite believe the worst of this is going to come to bear and is just kind of waiting for any sort of clarity because we seem back in that in that kind of phase where things change every couple of hours,' Mayfield said.
On Monday, President Donald Trump set a 25% tax on goods imported from Japan and South Korea and new tariff rates on a dozen other nations scheduled to go into effect on Aug. 1.
Trump provided notice by posting letters on Truth Social that were addressed to the leaders of the various countries. The letters warned them to not retaliate by increasing their own import taxes, or else the Trump administration would further increase tariffs.
Just before hefty U.S. tariffs on goods imported from nearly every country around the globe were to take effect in April, Trump postponed the levies for 90 days in hopes that foreign governments would be more willing to strike new trade deals. That 90-day negotiating period was set to expire before Wednesday.
With the tariffs set to kick in now on Aug. 1, the latest move by the White House amounts to essentially a four-week extension of its previous 90-day pause, wrote Tobin Marcus, an analyst at Wolfe Research.
'At a very basic level, nothing actually happened based on Trump sending these letters, so there's no reason to panic over headlines,' he wrote. 'But we think these moves do contain some signal about where the trade war is heading, and that signal is mostly hawkish.'
During a cabinet meeting Tuesday, Trump said he would be announcing tariffs on pharmaceutical drugs at a 'very, very high rate, like 200%.' He also said he would sign an executive order placing a 50% tariff on copper imports, matching the rates charged on steel and aluminum.
Shares in mining company Freeport-McMoRan rose 2.5% following Trump's remarks. The price of copper for September delivery jumped 13.1% to $5.69 per pound.
This latest phase in the trade war heightens the threat of potentially more severe tariffs that's been hanging over the global economy. Higher taxes on imported goods could hinder economic growth, if not increase recession risks.
Gains in technology, energy and health care stocks helped outweigh a pullback in banks and other sectors.
Intel jumped 7.2%, Exxon Mobil rose 2.8% and AbbVie rose 1.1%. JPMorgan and Bank of America each fell 3.1%.
Amazon shares fell 1.8% as the online retail giant kicked off Prime Day, which, beginning this year, lasts four days. Amazon launched the membership sales event in 2015 and expanded it to two days in 2019.
Elsewhere in the market, First Solar slid 6.5% after Trump issued an executive order ending subsidies for foreign-controlled energy companies.
Hershey Co. lost 3.2% after the chocolate maker announced that Wendy's CEO Kirk Tanner will succeed current CEO Michele Buck, who is retiring.
Shares in WeightWatchers parent WW International gave up an early gain and dropped 1.1% after the company announced that it has completed its reorganization and relisting on Nasdaq. The company filed for Chapter 11 bankruptcy protection in May to eliminate $1.15 billion in debt and focus on its transition into a telehealth services provider.
Bond yields mostly rose. The yield on the 10-year Treasury edged up to 4.40% from 4.39% late Monday.
All told, the S&P 500 fell 4.46 points to 6,225.52. The Dow lost 165.60 points to 44,240.76, and the Nasdaq added 5.95 points to 20,418.46.
The market's downbeat start to the week follows a strong run for stocks, which pushed further into record heights last week after a better-than-expected U.S. jobs report.
In stock markets overseas, indexes rose across much of Europe and Asia. In two of the bigger moves, South Korea's Kospi surged 1.8%, and Hong Kong's Hang Seng index climbed 1.1%.
The National Federation of Independent Business reported Tuesday that its small business optimism index fell slightly last month, in line with analysts' expectations. The index tracks how small firms view the U.S. economy and their business prospects.
On Wednesday the Federal Reserve will release minutes from its policymaking committee's meeting last month. The Fed's chair, Jerome Powell, has said the central bank wants to wait and see how Trump's tariffs affect the economy and inflation before making its next move on interest rates.
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The Mainichi
4 hours ago
- The Mainichi
PM warns Japan should not be underestimated, stoking tariff concern
TOKYO (Kyodo) -- Prime Minister Shigeru Ishiba's recent remark that Japan should not be "underestimated" by the United States is raising concerns among politicians and government officials at home about potential adverse effects on ongoing tariff negotiations. The comment, made during a stump speech for the July 20 House of Councillors election, is widely seen as an effort by Ishiba to emphasize his commitment to protecting national interests, with an eye toward his domestic audience and supporters of the Liberal Democratic Party. Still, it is unusual for a sitting Japanese prime minister to use such strong language toward the United States, a longtime security ally. Japan was among the first countries to begin bilateral negotiations with the United States over President Donald Trump's tariff policy. Trump announced earlier this week that he will impose a 25 percent tariff on Japan starting Aug. 1. "It's a battle where our national interests are at stake. Do not underestimate us. Even if it is an ally that we are negotiating with, we must say (what needs to be said) without hesitation," Ishiba said in front of supporters and others in Chiba Prefecture, near Tokyo, on Wednesday. "We will protect what must be protected." Despite multiple rounds of ministerial talks and a face-to-face summit between Ishiba and Trump, Japan has yet to bridge differences with the United States, a key trading partner. Following Trump's announcement of a 25 percent tariff, Ishiba said Tuesday that his government will step up negotiations to reach a mutually beneficial deal by Aug. 1, the extended deadline. Ishiba's comment prompted an immediate reaction from opposition lawmakers, who have largely been taking a wait-and-see stance on how the government will engage in the bilateral tariff talks. "Even as a campaign strategy, using such strong words in the absence of the negotiating partner will be negative if Japan wants to advance negotiations smoothly. The comment will rather undermine our national interests," Yuichiro Tamaki, who heads the Democratic Party for the People, a small opposition force, told reporters. A source close to the Ishiba government said, the prime minister's remark "must have complicated the situation for the negotiators." Chief negotiator Ryosei Akazawa, a close aide to Ishiba, has said he will accelerate talks with the United States toward reaching a "package" deal. Since the start of the negotiations, Japan has emphasized its contributions to the United States as an ally, highlighting investments by Japanese firms that have helped create jobs in the world's largest economy. But Trump, who sees the imposition of tariffs as an effective way to reduce his country's massive trade deficit with Japan, has appeared unfazed. He has taken issue with how Japan is not importing enough U.S. cars or rice, and claims that bilateral trade is not reciprocal. After his remark stirred reactions, Ishiba said on a TV program Thursday that he used the language to convey that Japan should step up efforts to reduce its dependence on the United States. "If their thinking is that we have to listen and follow what they say because we rely on them so much, we'd say, 'Don't look down on us,'" Ishiba said in reference to Japan's close security and economic ties. In addition to the proposed reciprocal tariff, a separate 25 percent import levy on Japanese cars is seen as a major stumbling block in the negotiations, given the importance of the auto sector in both countries. Automakers like Toyota Motor Corp. form the backbone of Japan's export-driven economy. Ahead of the upper house election, a must-win for Ishiba after losing majority control of the more powerful House of Representatives last October, he has repeatedly stressed that Japan will not make easy concessions. "It looks as if the comment has raised the bar (for bilateral negotiations)," Masahisa Sato, a senior lawmaker of Ishiba's LDP, who is a candidate seeking another term in the upper house, said in a social media post. "He should not have made such a comment during election campaigning," said Sato, who once served as a senior vice foreign minister.
Kyodo News
5 hours ago
- Kyodo News
FOCUS: Trump-Kim summit not eyed anytime soon amid Pyongyang-Moscow ties
KUALA LUMPUR - Although U.S. President Donald Trump has repeatedly indicated his willingness to reengage with North Korean leader Kim Jong Un, Pyongyang did not send a representative to an Asia-Pacific security forum in Kuala Lumpur attended by U.S. Secretary of State Marco Rubio. Some Korean Peninsula affairs experts do not foresee another summit occurring any time soon between Trump and Kim, who met three times during the U.S. president's first four-year term through 2021, saying Pyongyang has no incentive to resume dialogue with Washington amid its stronger ties with Moscow. North Korea last dispatched its foreign minister to the 27-member ASEAN Regional Forum, one of the few multilateral events involving Pyongyang, in 2018. The other ARF members include Japan, South Korea, Russia and the United States. This year marked the first time for Pyongyang to skip the event altogether since joining the forum in 2000, having previously sent ambassadors in place of its foreign minister. Malaysia, this year's ARF chair, and North Korea severed diplomatic ties in 2021 after the murder of Kim Jong Nam, the estranged half-brother of Kim Jong Un, at a Kuala Lumpur airport in 2017. Atsuhito Isozaki, professor at Keio University, pointed out that North Korea was left frustrated by the three Trump-Kim summits because it did not secure any benefits despite making concessions to the United States, including the suspension of missile launches in 2018 and the release of detained U.S. nationals. In June 2018, Trump became the first sitting U.S. president to hold talks with a North Korean leader when he met Kim in Singapore, with the two agreeing that Washington would provide security guarantees to Pyongyang in exchange for the "complete" denuclearization of the Korean Peninsula. But the countries' denuclearization talks ultimately collapsed when they met again in Hanoi in February 2019, as they failed to bridge the gap between U.S. demands and North Korea's call for sanctions relief. In June that year, Trump and Kim held a surprise meeting in the Demilitarized Zone dividing the two Koreas. After signing a partnership treaty with Moscow last year, "North Korea can now freely sell its weapons and deploy troops to Russia," Isozaki said. "There is no need for North Korea to negotiate with the United States for sanctions relief now." Russia, a veto-wielding permanent member of the U.N. Security Council, has procured soldiers and ammunition from North Korea to boost its war efforts against Ukraine, in violation of U.N. sanctions imposed over Pyongyang's nuclear and missile development programs. The treaty signed by Kim and Russian President Vladimir Putin in June 2024 includes a provision on mutual assistance if either nation comes under attack. Pyongyang is believed to have received technical assistance from Moscow for its military development in exchange for the troop deployment. At present, North Korea has "gone all in" on Russia and will not be interested in negotiating with the United States unless Washington makes "huge concessions" such as offering to normalize bilateral diplomatic relations, Isozaki added. With money flowing from Russia to North Korea to pay for its support in the Ukraine war, Moscow's full-scale invasion that began in 2022 was "a game changer" for Korean Peninsula affairs, the professor said in explaining how the situation differs from 2018 and 2019 when the previous Trump-Kim summits were held. Shunji Hiraiwa, professor at Nanzan University, said North Korea may be satisfied with its "win-win" relations with Russia for now, but over the long term he thinks Pyongyang may be eager to negotiate with the United States to achieve the lifting of sanctions and diversify its economic partners. With Moscow's support, North Korea can "eke out a living" and choose the path of survival as a "rogue nation," but as a next step Pyongyang will likely aim to earn more foreign currency from Southeast Asian nations, Europe and Japan in addition to Russia and China, a longtime economic benefactor, he said. "North Korea is not expected to jump at U.S. proposals (for dialogue) in the short term, but its true intention must be having the United States accept it as a nuclear state, normalize bilateral relations and win the removal of sanctions," Hiraiwa said. The Nanzan University professor said North Korea may aim for negotiations with the United States on arms control, not denuclearization, after declaring the completion of its five-year plan to boost national defense at a ruling party congress to be held possibly around year-end. The ruling Workers' Party of Korea last held a congress, considered the supreme organ of the party, in January 2021. As for the prospects of cooperation between North Korea and Russia, Hiraiwa warned Moscow could "betray" Pyongyang depending on how the war in Ukraine turns out and whether its relations with the United States and European countries change, lowering the value of its partnership with North Korea. Ramon Pacheco Pardo, professor at King's College London, echoed Hiraiwa's view, saying Putin has "ditched North Korea several times in the past" when it suited Russia's broader foreign policy interests, so "this could happen again in the future." For example, Putin allowed U.N. sanctions over Pyongyang's nuclear and missile programs to be passed between 2006 and 2017, Pardo said. On the outlook for North Korea's relations with Japan, Isozaki said it is "very bleak" as Pyongyang is not interested in holding talks following Tokyo's imposition of sanctions not only over its nuclear and missile development programs but its past abductions of Japanese nationals. Japan and North Korea last held summit talks in 2004 when then Prime Minister Junichiro Koizumi met in Pyongyang with North Korean leader Kim Jong Il, the late father of Kim Jong Un. Hiraiwa said North Korea would ultimately seek financial aid pledged by Japan under the 2002 Pyongyang Declaration signed by Koizumi and Kim Jong Il during their first summit in September that year. The two Asian countries agreed to make "every possible effort for an early normalization of relations" and Japan pledged to extend economic cooperation to North Korea after ties are normalized. But Pyongyang doubts the current Japanese government led by Prime Minister Shigeru Ishiba has enough public support to promote the normalization of diplomatic ties. "North Korea will be watching how long the Ishiba government will continue," Hiraiwa said.
Asahi Shimbun
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- Asahi Shimbun
Nissan, Honda eye tie-up in U.S. market due to Trump's tariffs
The logos of Nissan Motor Co. and Honda Motor Co. (Asahi Shimbun file photo) The high automobile tariffs imposed by the Trump administration have apparently brought two Japanese automakers back to the bargaining table. Nissan Motor Co. and Honda Motor Co. are considering a cooperative arrangement under which Nissan would produce pickup trucks for Honda at its underutilized U.S. plant, sources said. The two companies announced plans to merge last December, but those discussions were abruptly called off two months later, in large part because of Honda's proposal to make Nissan a subsidiary. The latest cooperative proposal is designed to augment weak points in each company. Honda does not have many pickup trucks in its U.S. sales lineup and Nissan's U.S. plants are operating at less than full capacity because of sluggish sales in North America. In May, Ivan Espinosa, Nissan's new president, said his company was exploring the feasibility of cooperation with Honda and Mitsubishi Motors Corp. as well as how to better utilize its U.S. plants. Nissan officials said on July 11 that they were still eyeing a cooperative relationship with Honda but refused to comment on speculation. Both Honda and Nissan have sharply downgraded their estimates for operating profits in the fiscal year ending March 2026, with Honda projecting a decline of 650 billion yen ($4.4 billion) while Nissan is estimating up to a 450-billion-yen decline. Increasing production in the United States would benefit both companies. Discussions between executives of the two companies apparently resumed after Espinosa took over. A source said both companies were facing difficulties not only due to the tariffs imposed by U.S. President Donald Trump but also a drop-off in sales of electric vehicles. (This article was written by Kenta Nakamura and Akihiro Nishiyama.)
