New York (AFP) – Major stock markets on Monday largely shrugged off US President Donald Trump’s latest tariffs threat to hit the EU and Mexico with 30 percent levies. Analysts said investors viewed the warning as yet another negotiating ploy against America’s trading partners rather than a genuine move — although lingering uncertainty weighed on oil prices. US shares initially dipped on Trump’s threat — which is due to take effect at the start of August — but then pushed higher, with the Nasdaq edging to a fresh record.
“The market is betting that by August 1st these tariffs are not going to be implemented at these levels,” said Peter Cardillo of Spartan Capital Securities. “And so the market continues to rally.” European indices finished largely down, but with no sign of panic selling. London’s FTSE climbed. Many Asian markets closed lower, but not Shanghai and Hong Kong. Markets believe the latest threat of 30-percent tariffs on the EU, the United States’ biggest trading partner, was “Trump-style brinkmanship — sound and fury meant to shake down concessions before the August 1 deadline,” explained Stephen Innes, managing partner at SPI Asset Management.
“Financial markets are acting like the 30-percent rate is a mere tactic from Donald Trump, rather than a reality,” agreed Kathleen Brooks, research director at XTB. Yet some, including Kim Heuacker, an associate consultant at Camarco, noted “there remains the genuine risk that, to save face, he (Trump) may activate the high tariffs.” The European Union, stung by Trump’s unexpected raising of the stakes amid trade negotiations, is looking at targeting 72 billion euros’ ($84 billion) worth of US imports if talks with Washington fail, its trade chief, Commissioner Maros Sefcovic, said.
With Trump’s threat being discounted, bandwidth was given to other news. Bitcoin struck a record high above $123,000, fueled by possible regulatory changes for crypto assets in the United States. Attention was also focused on Trump on Monday vowing “very severe tariffs” on Russia’s trade partners if Moscow did not resolve its war in Ukraine within 50 days. Oil traders initially saw those sanctions constricting supply, and they pushed crude prices higher — before selling off under the cloud of a possible broader trade war that would depress global demand.
Besides tariffs, markets are looking ahead to earnings from JPMorgan Chase, Bank of America and other banks that will offer updates on the state of US consumers and on the health of the companies’ trading and investment businesses. Markets are also awaiting US government reports on consumer pricing and retail sales for June, which will inform expectations on the likelihood and timing of Federal Reserve interest rate changes. Futures markets are betting on a Fed interest rate cut in September.
– Key figures at around 2030 GMT –
New York – Dow: UP 0.2 percent at 44,459.65 (close)
New York – S&P 500: UP 0.1 percent at 6,268.56 (close)
New York – Nasdaq Composite: UP 0.3 percent at 20,640.33 (close)
London – FTSE 100: UP 0.6 percent at 8,998.06
Paris – CAC 40: DOWN 0.3 percent at 7,808.17
Frankfurt – DAX: DOWN 0.4 percent at 24,160.64
Tokyo – Nikkei 225: DOWN 0.3 percent at 39,459.62 (close)
Hong Kong – Hang Seng Index: UP 0.3 percent at 24,203.32 (close)
Shanghai – Composite: UP 0.3 percent at 3,519.65 (close)
Euro/dollar: DOWN at $1.1670 from $1.1689
Pound/dollar: DOWN at $1.3428 from $1.3493
Dollar/yen: UP at 147.77 yen from 147.43 yen
Euro/pound: UP at 86.88 pence from 86.64 pence
Brent North Sea Crude: DOWN 1.6 percent at $69.21 per barrel
West Texas Intermediate: DOWN 2.2 percent at $66.98 per barrel
© 2024 AFP
