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Wall Street Journal
34 minutes ago
- General
- Wall Street Journal
News Quiz for June 28, 2025
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Yahoo
2 hours ago
- Business
- Yahoo
The Reciprocal Tariff Pause Ends in 11 Days -- Is a "Trump Dump" of Stocks Imminent?
Donald Trump's "Liberation Day" tariff announcements on April 2 were followed one week later by a 90-day pause on higher reciprocal tariffs tied to dozens of countries. Though tariff uncertainty is an undeniable headwind, the historical priciness of stocks may be a bigger worry. While historical precedent can act as a headwind for the Dow, S&P 500, and Nasdaq Composite over the short run, it's a clear ally of investors over extended periods. 10 stocks we like better than S&P 500 Index › Over multiple decades, no asset class has delivered a higher average annual return to investors than stocks. But despite this outperformance, it doesn't mean that Wall Street's major stock indexes get from point A to point B in a straight line. The first half of 2025 has been particularly volatile for equities. After the iconic Dow Jones Industrial Average (DJINDICES: ^DJI), benchmark S&P 500 (SNPINDEX: ^GSPC), and growth-powered Nasdaq Composite (NASDAQINDEX: ^IXIC) hit respective all-time highs between December 2024 and mid-February 2025, the Dow and S&P 500 dipped into correction territory, with the Nasdaq entering a full-blown bear market. During a one-week period in early April, the S&P 500 endured its fifth-largest two-day percentage drop in 75 years (-10.5%) and enjoyed its biggest single-session point gain in history. These wild stock market gyrations are the result of President Donald Trump's "Liberation Day" tariff announcements on April 2. Following the close of trading on April 2, Trump unveiled a 10% sweeping global tariff and implemented higher "reciprocal tariff" rates on dozens of countries that have historically carried adverse trade imbalances with America. This announcement is what precipitated the S&P 500's aforementioned 10.5% cumulative drop over two sessions. But in a surprise move, the president capitulated on April 9 by implementing a 90-day pause of these higher reciprocal tariff rates for all countries except China (a separate 90-day reciprocal tariff relief was reached with the world's No. 2 economy in May). This 90-day pause is what led to the respective largest single-day point gains in the history of the Dow, S&P 500, and Nasdaq Composite on April 9. There's just one 90-day reciprocal tariff pause window ends in 11 days. Is another "Trump dump" of stocks imminent? The 90-day window, which began at 12:01 a.m. EDT on April 10, will officially end at midnight when the calendar changes over to July 9. This will reintroduce substantially higher tariff rates for dozens of countries. Trump's tariff and trade policy comes with a number of unknowns. For instance, there's the possibility that tariffs could worsen trade relations with America's top trade partners, as well as incite anti-American sentiment in overseas markets toward U.S. goods. Another worry, highlighted by four New York Federal Reserve economists from Liberty Street Economics in "Do Import Tariffs Protect U.S. Firms?", is the lack of differentiation between input and output tariffs. Output tariffs are duties placed on finished goods brought into the country, while input tariffs apply to goods used to manufacture/complete finished products in America. Input tariffs can increase the domestic rate of inflation and weigh on corporate margins. But historical precedent is the true concern. When Donald Trump introduced tariffs on China in 2018-2019, the stocks directly impacted by the tariffs performed considerably worse than those unaffected by them on announcement days. We witnessed the adverse impact that announcement days can have on stocks on April 3 and April 4 of this year. Worse yet, the deleterious effects of tariffs on businesses lasted well beyond their initial announcement. Liberty Street Economics found that from 2019 to 2021, profits, employment, sales, and labor productivity, on average, fell for businesses directly impacted by Trump's China tariffs. While this doesn't intimate that a "Trump dump" is imminent, it does strongly lean toward negative future returns for stocks if this 90-day reciprocal tariff pause expires without any real resolution. There's no question that this rapidly approaching 90-day reciprocal tariff pause is important to the health of the U.S. economy and investors -- but it may not be Wall Street's biggest threat. Though President Trump inherited a bull market, he entered office for his nonconsecutive second term with stocks at one of their priciest valuations in history. Most investors rely on the traditional price-to-earnings (P/E) ratio as their measure of value when comparing stocks. This ratio, which divides a company's share price by its trailing-12-month earnings per share (EPS), tends to work great for mature businesses but can get tripped up by growth stocks and periods of recession where EPS plummets or turns negative. The S&P 500's Shiller P/E ratio, which is also referred to as the cyclically adjusted P/E ratio (CAPE ratio), does a better job of making apples-to-apples valuation comparisons on a back-tested basis. The Shiller P/E is based on average inflation-adjusted EPS over the prior 10 years. Shortly before Donald Trump was inaugurated, the S&P 500's Shiller P/E nearly touched a multiple of 39, which is its third-highest reading when back-tested to January 1871. It also represented a 125% premium to the average Shiller P/E multiple over a 154-year period. What's particularly worrisome about the Shiller P/E is how stocks have previously responded when surpassing and maintaining a reading of 30 for at least two months. Including the present, this scenario has occurred six times in 154 years. Following the five prior instances where the Shiller P/E topped 30, the Dow Jones Industrial Average, S&P 500, and/or Nasdaq Composite, eventually (keyword), shed 20% to 89% of their value. This is to say that premium stock valuations weren't tolerated over extended periods. Even if there were a reciprocal tariff resolution from the White House, stocks would still be historically pricey. When it comes to tariffs and pricey stock markets, history hasn't worked in favor of investors. But when examined with a wide lens (i.e., over multiple decades), there's no greater ally for investors than time and history. At any given point, there are always headwinds threatening to weigh down the stock market's major indexes. Geopolitical tensions between Israel and Iran, the end to the reciprocal tariff pause, climbing U.S. Treasury yields, and historically pricey stock valuations are just some of the potential downside catalysts at the moment. Although stock market corrections, bear markets, and even the occasional crash are inevitable, these events all share one thing in common: They're historically short-lived. The disproportionate nature of stock market cycles overwhelmingly favors investors with an optimistic long-term mindset. Shortly after the broad-based S&P 500 was confirmed to be in a new bull market in June 2023, the analysts at Bespoke Investment Group published a data set on X (formerly Twitter) that compared the length of every S&P 500 bull and bear market dating back to the start of the Great Depression in September 1929. Bespoke's data set covered 27 separate S&P 500 bull and bear markets. The 27 bear markets have averaged 286 calendar days in length, which works out to around 9.5 months. Further, none of these 27 bear markets extended beyond 630 calendar days. Meanwhile, the typical S&P 500 bull market has stuck around for 1,011 calendar days, or roughly two years and nine months. If the current bull market is extrapolated from June 2023 to present day, it means more than half (14 out of 27) of all S&P 500 bull markets since the Great Depression have lasted longer than the lengthiest bear market. Regardless of the short-term headwinds that stocks are working their way through, being optimistic and allowing time to work in your favor has historically been a moneymaking decision. Before you buy stock in S&P 500 Index, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and S&P 500 Index wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $704,676!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $950,198!* Now, it's worth noting Stock Advisor's total average return is 1,048% — a market-crushing outperformance compared to 175% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 23, 2025 Sean Williams has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. The Reciprocal Tariff Pause Ends in 11 Days -- Is a "Trump Dump" of Stocks Imminent? was originally published by The Motley Fool
The Star
12 hours ago
- Business
- The Star
S&P 500 hits new record high despite U.S.-Canada trade tensions
NEW YORK, June 27 (Xinhua) -- U.S. stock index S&P 500 closed at record high on Friday, despite a brief retreat following U.S. President Donald Trump's announcement on terminating all trade talks with Canada. The Dow Jones Industrial Average rose 432.43 points, or 1 percent, to 43,819.27, boosted by huge gains from Nike after a better-than-expected earnings report. The S&P 500 added 32.05 points, or 0.52 percent, to 6,173.07, a record close high for the first time since February. The Nasdaq Composite Index increased by 105.54 points, or 0.52 percent, to 20,273.46. Nine of the 11 primary S&P 500 sectors ended in green, with consumer discretionary and communication services leading the gainers by adding 1.78 percent and 1.55 percent, respectively. Meanwhile, energy and health led the laggards by losing 0.50 percent and 0.17 percent, respectively. Equities initially moved higher in the morning following comments by U.S. Commerce Secretary Howard Lutnick, who told Bloomberg News late Thursday that a framework agreement between China and the United States on trade had been finalized. However, momentum faded after Trump posted on Truth Social that negotiations with Canada were off, injecting fresh uncertainty into global trade dynamics. "I can see where the risks are here -- if the trade is just hype from the White House and no deals are really forthcoming, then this market is going to roll over," Thierry Wizman, global FX and rates strategist at Macquarie Group. "Ultimately, this all comes back to growth in the U.S. economy and growth of earnings." On the economic front, U.S. personal consumption expenditures (PCE) price index, the Federal Reserve's preferred inflation gauge, rose 0.1 percent in May on a seasonally adjusted basis, in line with expectations. The annual inflation rate came in at 2.3 percent, matching economists' forecasts. Core PCE price index, which strips out volatile food and energy costs, increased by 0.2 percent for the month and 2.7 percent year over year, slightly above expectations of 0.1 percent and 2.6 percent, respectively. U.S. investor sentiment improved in June as inflation fears pulled back, according to the University of Michigan's latest survey released Friday. The headline sentiment reading rose to 60.7, up 16.3 percent from May and close to the Dow Jones estimate for 60.5. The index was still 11 percent below the same month a year ago. "Consumers continue to be concerned about the potential impact of tariffs, but at this time they do not appear to be connecting developments in the Middle East with the economy," survey director Joanne Hsu said in a statement. In corporate news, Nike led gains across major indexes, with its shares surging 15.19 percent after the company reported quarterly earnings that topped Wall Street estimates. The sportswear giant also unveiled plans to offset potential tariff-related headwinds, which investors viewed positively. Large-cap technology stocks were mixed. Tesla fell 1.34 percent, while Alphabet and Amazon gained more than 2 percent. Broadcom and Microsoft posted modest losses, while Nvidia and Meta Platforms were up more than 1 percent, continuing their recent upward momentum. U.S. stock markets have shown resilience in recent weeks amid volatile geopolitical and economic headlines, as investors assess trade developments and incoming economic data for clues on the Fed's next moves.
Yahoo
13 hours ago
- Business
- Yahoo
S&P 500 and Nasdaq Climb to Record Highs on China Trade Optimism
The S&P 500 Index ($SPX) (SPY) Friday closed up +0.52%, the Dow Jones Industrials Index ($DOWI) (DIA) closed up +1.00%, and the Nasdaq 100 Index ($IUXX) (QQQ) closed up +0.39%. September E-mini S&P futures (ESU25) are up +0.42%, and September E-mini Nasdaq futures (NQU25) are up +0.34%. Stock indexes Friday settled higher, with the S&P 500 and Nasdaq 100 posting new all-time highs, and the Dow Jones Industrials posting a 3-3/4 month high. Positive trade news buoyed stocks Friday as the US moves closer to trade deals with China and other trading partners. Stocks also found support on Friday after the University of Michigan's US June consumer sentiment index improved, as inflation expectations unexpectedly declined. US Commerce Secretary Lutnick said that the US and China had finalized a trade understanding reached last month in Geneva, including a commitment from China to deliver rare earth materials. China's Commerce Ministry also confirmed the agreement and stated that it will review and approve eligible applications for the export of controlled items, and the US will cancel the restrictive measures taken against China. In addition, Commerce Secretary Lutnick said the White House has imminent plans to reach agreements with a set of 10 major trading partners ahead of a July 9 deadline for reciprocal tariffs. Meanwhile, the Treasury Department announced a deal with G-7 countries that will exclude US companies from some taxes imposed by other countries in exchange for removing the 'revenge tax' proposal from President Trump's tax bill. However, stocks fell back from their best levels on Friday afternoon after President Trump announced he was ending all trade talks with Canada over its digital services tax and threatened to impose new tariffs on the country within the next week. Gains in stocks were also limited on Friday's weaker-than-expected US May personal spending and income reports, as well as the stronger-than-expected May core PCE price index. US May personal spending unexpectedly fell -0.1% m/m, weaker than expectations of a +0.1% m/m increase. May personal income unexpectedly fell -0.5% m/m, weaker than expectations of +0.3% m/m and the biggest decline in more than 3-1/2 years. The US May core PCE price index, the Fed's preferred gauge of underlying inflation, rose +0.2% m/m and +2.7% y/y, stronger than expectations of +0.1% m/m and +2.6% y/y. The University of Michigan US Jun consumer sentiment index was revised upward by +0.2 to 60.7, stronger than expectations of no change at 60.5. The University of Michigan US Jun 1-year inflation expectations were unexpectedly revised lower to 5.0%, weaker than expectations of an upward revision to 5.2%. The 5-10 year inflation expectations were revised downward to 4.0%, weaker than expectations of no change at 4.1%. Minneapolis Fed President Kashkari said he sees two 25-bp Fed rate cuts this year, with the first potentially in September, but warned that tariffs could have a delayed impact on inflation, and policymakers should remain flexible. On the negative side for stocks is the upcoming earnings season, which begins in two weeks. Bloomberg Intelligence data show the consensus for Q2 earnings of S&P 500 companies to rise by 2.8% year-over-year, the smallest increase in two years. Also, only six of the 11 S&P 500 sectors are projected to post an increase in earnings, the fewest since Q1 of 2023, according to Yardeni Research. Federal funds futures prices are discounting the chances at 19% for a -25 bp rate cut at the July 29-30 FOMC meeting. Overseas stock markets on Friday settled mixed. The Euro Stoxx 50 rallied to a 1-1/2 week high and closed up +1.56%. China's Shanghai Composite closed down -0.70%. Japan's Nikkei Stock 225 climbed to a 5-month high and closed up +1.43%. Interest Rates September 10-year T-notes (ZNU25) Friday closed down by -6.5 ticks. The 10-year T-note yield rose +4.3 bp to 4.285%. T-note prices were under pressure on Friday due to some negative carryover from weakness in European government bonds. Also, positive trade news on Friday pushed the S&P 500 to a new record high and reduced safe-haven demand for T-notes. In addition, the stronger-than-expected May core PCE price index, the Fed's preferred gauge of underlying inflation, is negative for T-notes. Losses in T-notes were limited due to the unexpected declines in the US May personal spending and income reports, dovish factors for Fed policy. Also, the unexpected downward revision to the University of Michigan US inflation expectations is bullish for T-notes. In addition, dovish comments on Friday from Minneapolis Fed President Kashkari were supportive of T-notes, as he stated that he sees two 25-bp Fed rate cuts this year. European government bond yields on Friday moved higher. The 10-year German bund yield rose to a 1-month high of 2.606% and finished up +2.3 bp to 2.592%. The 10-year UK gilt yield rose +3.2 bp to 4.504%. The Eurozone Jun economic confidence survey unexpectedly fell -0.8 to 94.0, weaker than expectations of unchanged at 94.8. Swaps are discounting the chances at 7% for a -25 bp rate cut by the ECB at the July 24 policy meeting. US Stock Movers Nike (NKE) closed up more than +15% to lead gainers in the S&P 500 and Dow Jones Industrials after reporting Q4 revenue of $11.10 billion, better than the consensus of $10.72 billion, and saying it is taking steps to mitigate tariffs, including 'surgical' price increases and reducing production in China. Apogee Enterprises (APOG) closed up more than +6% after raising guidance on its 2026 adjusted EPS forecast to $3.80-$4.20 from a previous forecast of $3.55-$4.10. Positive credit news lifted cruise line stocks on Friday after Norwegian Cruise Line Holdings announced it successfully upsized its existing senior secured revolving credit facility from $1.7 billion to $2.486 billion, and Moody's upgraded Carnival's long-term corporate rating to Ba2 from Ba3. As a result, Carnival (CCL) and Royal Caribbean Cruises Ltd (RCL) closed up more than +4% and Norwegian Cruise Line Holdings (NCLH) closed up more than +3%. Boeing (BA) closed up more than +5% after Redburn upgraded the stock to buy from neutral with a price target of $275. (AMZN) closed up more than +2% after BNP Paribas Exane upgraded the stock to outperform from neutral with a price target of $254. Alphabet (GOOGL) closed up more than +2% after Citizens JMP Securities LLC upgraded the stock to outperform from market perform with a price target of $220. Trade Desk (TTD) closed up more than +2% after Evercore ISI upgraded the stock to outperform from in line with a price target of $90. Palantir Technologies (PLTR) closed down more than -9% to lead losers in the S&P 500 and Nasdaq 100 after Canada announced a tax on digital business from the US. Coinbase Global (COIN) also closed down more than -5% on the news. Gold mining stocks are under pressure today, with the price of COMEX gold falling to a 4-week low. As a result, Anglogold Ashanti Plc (AU) closed down more than -5%, and Gold Fields Ltd (GFI) and Newmont (NEM) closed down more than -3%. CorMedix (CRMD) closed down more than -16% after announcing it intends to offer and sell $85 million of shares of its common stock in an underwritten public offering. Uber Technologies (UBER) closed down more than -1% after Canaccord Genuity downgraded the stock to hold from buy. CrowdStrike Holdings (CRWD) closed down more than -1% on signs of insider selling after an SEC filing showed the company's CEO, President, CFO, and CAO sold a combined $19.9 million of shares on Monday. Earnings Reports (6/30/2025) B Riley Financial Inc (RILY), Compass Diversified Holdings (CODI), Golden Matrix Group Inc (GMGI), Outdoor Holding Co (POWW), Progress Software Corp (PRGS). On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Hamilton Spectator
14 hours ago
- Business
- Hamilton Spectator
S&P/TSX composite finishes lower Friday, U.S. markets hit new highs
TORONTO - Canada's main stock index finished lower Friday after U.S. President Donald Trump said he is 'terminating' trade discussions with Canada, while U.S. markets hit new highs. The S&P/TSX composite index was down 59.63 points at 26,692.32. In New York, the Dow Jones industrial average was up 432.43 points at 43,819.27. The S&P 500 index was up 32.05 points at 6,173.07, while the Nasdaq composite was up 105.54 points at 20,273.46. The Canadian dollar traded for 73.12 cents US compared with 73.31 cents US on Thursday. The August crude oil contract was up 28 cents US at US$65.52 per barrel. The August gold contract was down US$60.40 at US$3,287.60 an ounce. This report by The Canadian Press was first published June 27, 2025. Companies in this story: (TSX:GSPTSE, TSX:CADUSD)
