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Yahoo
15-07-2025
- Business
- Yahoo
White House has a new take on the markets' mild tariff reaction
Markets (^GSPC, ^IXIC, ^DJI) have been brushing off President Trump's daily tariff threats. Yahoo Finance Washington Correspondent Ben Werschkul joins Market Domination host Josh Lipton to explain how the White House's read on market reactions sharply contrasts with Wall Street's view. He also discusses the president's new deal with Indonesia and what it could signal. To watch more expert insights and analysis on the latest market action, check out more Market Domination here. markets growing less responsive to ongoing trade talks and there's different views on why that may be. For more, let's get to Yahoo Finance's Washington correspondent. That would be, of course, Ben Worskol. Ben. Hey, Josh. Yes. So this is the question, kind of one of the big questions of the month for markets is sort of why are markets shrugging off this, these tariff threats that I'm on with you pretty much every day to outline, they come kind of every day from Trump. It's a nuanced question for sure. Our colleague Josh Shafer has a smart look at the kind of China aspect of this. But what I'm looking at for a story tomorrow in Yahoo Finance is the White House view of this. And this is important for traders to know because it's essentially 180 degrees away from most of what you're going to hear on Wall Street. The White House case, which has, we've seen in evidence in recent days, and it's gotten sharper, kind of as markets continue to rise, is essentially that the signal we're getting here is that traders are okay with tariffs now. That the traders are saying that they understand what Trump is trying to do with tariffs and that the market reaction is, is, is, is, is, is reflecting that. You see a lot of skepticism from that on Wall Street, who kind of give the opposite view that traders, it's not like traders like tariffs now. They just don't believe Trump is going to follow through. But we're seeing this again and again. Treasury Secretary Scott Beson offered this morning that the markets understand what, what Trump is doing now, which is a clear contrast to April. Somebody's going to be wrong here. These are two sides, and this is, the question is kind of whether this question gets tested. The way it doesn't get tested is if Trump can follow through on different trade deals and lower rates via that route for him. We saw, we saw one pact with Indonesia today. But it does get tested if some of these, these trade deals don't go through, and then Trump is essentially empowered by this view that he, that, that, by not, by, by the market's not rising so far, maybe he can stand firm on tariffs and go forward. Put another way, does the market looking at the Taco trade essentially lessen the chance of Trump, of Trump chickening out? We're seeing some concerns on that front that maybe the markets are underpricing. You were talking about Jamie Diamond earlier. He's offered commentary on this. The markets are complacent in this. This is, this is going to be a big theme of the next few weeks as we get to this August 1st deadline. Ben, just quickly, you mentioned Indonesia there. I want your take because Trump did say he reached this deal with Indonesia. It does sound like we have, have some specifics there. Ben, what are the details? Yeah. So we have some specifics from the White House side on what this Indonesia pact brings forward today. Trump sketched it out to reporters and also on a truth social, two social posts. The headline here is a 19% tariff on Indonesian goods and from, and according to Trump, a 0% tariff on US companies trying to do business. As, as Trump put it, quote, full access to Indonesia. He added in true social that there's other aspects here, $15 billion in Indonesian purchases of US energy, four, four and a half billion dollars in American agriculture, and 50 Boeing jets. The key caveat here is that we do not have confirmation on this from the Indonesian side. This is a trend we've seen where Trump will announce a deal, and then the question is whether the other side has agreed to all the terms here. We saw a little bit of that with Vietnam. But either way, this is a clear indication that this is the sort of model he even, Trump even had a comment about this today, that this is the sort of outline of what he wants with these other deals. Essentially, somewhere around a 20% tariff on coming in, on product coming in, and then a 0% tariff on products going out. It's the sort of same parameters of what he laid out with Vietnam. So, so he's, it comes with sort of Trump is promising other trade deals again ahead of this August 1st deadline, in his view hoping to be kind of this be the, be the model going forward. 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
Yahoo
15-07-2025
- Business
- Yahoo
Why the stock market has shrugged off Trump's latest tariff threats
President Trump is once again turning up the tariff dial, but stocks aren't reacting nearly as strongly as they did back in April. In recent days, Trump has written letters threatening 30% duties on goods from Mexico and the European Union while also warning of 35% tariffs on Canadian imports. On Monday, he added the potential for 100% duties on goods from Russia. A few months back, similar headlines were driving the market action. Now, the S&P 500 (^GSPC) and Nasdaq Composite (^IXIC) are hovering near record highs despite the news. Perhaps part of this is the so-called TACO trade, a calling card for investors to stay invested because "Trump always chickens out" on his highest tariff threats. But Morgan Stanley chief investment officer Mike Wilson points out that what's at play is just math. The recent tariff announcements have said nothing about China, and as our chart below from Wilson shows, that's what matters to the widest array of industries. Wilson segmented various industries into different subsectors of exposure to tariffs. Seven categories, including technology and semiconductors, have "more material risk," meaning import exposure in that group from China is more than 15% of the global total of imports. In other words, tariffs on goods from China would hurt sectors like tech more than tariffs on nearly any other country listed in Wilson's work. Read more: What Trump's tariffs mean for the economy and your wallet "The more material trade-related risk for equity indices would be if tariff rates on China were to increase materially from here," Wilson wrote. "China is significant not only because of the number of industries with tariff cost exposure, but also because of the market cap weighting of those industries, in aggregate." JPMorgan chief US economist Michael Feroli estimates the effective US tariff rate has jumped to 16.9% in July from closer to 13% before President Trump began distributing letters to countries during the week of July 9. But importantly, no part of that change accounts for an increase in China tariffs. Those are estimated just shy of 50%, a far cry from the 145% once threatened. Meanwhile, there have actually been positive updates in terms of US-China trade. In a blog post late Monday night, Nvidia (NVDA) said it was applying to resume sales of its H20 GPUs in China, reversing a key headwind for the company's AI chip business. Nvidia wrote in the post that the US "assured Nvidia that licenses will be granted." Nvidia's move to once again sell H20 GPUs in China came just days after CEO Jensen Huang met with President Trump. Read more: 5 ways to tariff-proof your finances Fellow chipmaker Advanced Micro Devices (AMD) also said it is planning to resume sales of its AI chips for China that were banned in April, pending approval from the US Commerce Department. AMD shares were up nearly 7% Tuesday while Nvidia stock added over 4% to trade at a record high. Wedbush Securities analyst Dan Ives called the Nvidia announcement a "a watershed moment for Nvidia, the AI Revolution thesis, and the overall US tech industry." "Its also a major bullish tailwind for the tech sector as the green light for Nvidia will propel Street estimates to go up meaningfully over the coming years with China back in the fold," Ives said. And given that the tech sector is more than 30% of the S&P 500's market cap, the bullishness in tech is supporting the broader indexes gains. On Tuesday morning, Technology (XLK) was the only sector in the green, rising roughly 1% while the S&P 500 was essentially flat. Josh Schafer is a reporter for Yahoo Finance. Follow him on X @_joshschafer. Sign in to access your portfolio
Yahoo
03-07-2025
- Business
- Yahoo
Rate cut hopes build ahead of jobs report: Call of the Day
Markets (^GSPC, ^IXIC, ^DJI) are betting on interest rate cuts as economic data continues to soften, and today's jobs report could tip the scales. Morning Brief: Markets Sunrise anchor Ramzan Karmali breaks down how jobs numbers, trade optimism, and Federal Reserve expectations are all feeding into the S&P 500's recent record highs. To watch more expert insights and analysis on the latest market action, check out more Morning Brief: Market Sunrise here. Now, for our call of the day, as that jobs report release is getting closer, we want to look at more of its potential ripple effects. Now, I mentioned earlier that the S&P 500 recently hit record highs. Part of that drive higher has been because of optimism about trade deals being done. But there's also optimism about the Fed cutting rates. Weaker economic data in the past several weeks has pushed the markets to pricing two rate cuts more confidently. A month ago, it was only pricing in one more cut. And if that weaker data stream continues with today's jobs reports, then that should further boost rate cut bets. Now, the argument for a weaker number seems pretty logical, as well, as well as that weak economic data, there's more, there's those immigration policy changes and federal layoffs. Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
Yahoo
03-07-2025
- Business
- Yahoo
Fed might do 'supersized' rate cuts in the fall, economist says
Investors are watching record highs in the S&P 500 (^GSPC) and Nasdaq Composite (^IXIC), but questions remain about what's already priced in. Brian Jacobsen, chief economist and strategist at Annex Wealth Management, says a "supersized" interest rate cut from the Federal Reserve could come in September if inflation data stays mild and tariff pressures remain limited. To watch more expert insights and analysis on the latest market action, check out more Morning Brief here. What is already priced into this market with the S&P 500 and the NASDAQ composite records? That would seem to be already pricing in the bill passing, which it seems set to do. The tariff outcomes being relatively benign, we don't know if that's going to be the case, right? It doesn't feel like it's priced. They're pricing in a lot of negative potential outcomes here. I think you're absolutely correct. But when you look underneath the hood of the market, where the Fed funds futures are saying that there's basically no chance that the Fed is going to cut in July, I think that there's actually an increased probability that they might do a supersized cut in September, a lot like they did last year. Because we do know that the Fed chair Powell has said that if it wasn't for the tariff uncertainty that they really wouldn't have paused. And so if we get some rather tame inflation numbers, which I think we will get when the ones are released in a couple weeks and then before their September meeting, they could realize that, you know, tariffs, they do have an effect, but it's been mostly on the cost side for businesses. We've seen it also on the labor side a little bit. I mean, in today's report, even though it was a beat with the headline number, we actually saw a decline in aggregate hours worked across the economy of 0.6%. So more jobs were created, but the hours were cut. And so I think that it's not showing that the economy is in a position where it's really vulnerable and needs a rate cut, but I think that the Fed will feel like they can cut and they should have been continuing to cut all along. 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
Yahoo
27-06-2025
- Business
- Yahoo
S&P 500 hits record high, consumer sentiment rises
The S&P 500 (^GSPC) and Nasdaq Composite (^IXIC) are hitting fresh record highs on renewed trade deal hopes. Also giving stocks a boost is the University of Michigan Index of Consumer Sentiment, which rose 16% in June. Yahoo Finance Senior Reporter Allie Canal reports on the latest market action. To watch more expert insights and analysis on the latest market action, check out more Market Catalysts here.
