London (AFP) – Wall Street on Wednesday largely shrugged off data showing an unexpected drop in US private sector jobs and US President Donald Trump ruling out a fresh tariffs delay. Meanwhile, the pound fell around one percent against the dollar amid speculation about the future of British finance minister Rachel Reeves.
The S&P 500 and Nasdaq Composite were both higher in late morning trading despite data showing the US private sector unexpectedly losing 33,000 jobs in June, a potential sign of labour market weakness due to the prospect of high tariffs on key US trading partners snapping into place next week. It was the first such decline in recent years, in data that will be scrutinised ahead of government data on the US jobs market due to be released on Thursday.
A week before the 90-day pause on the imposition of stiff new US tariffs ends, few governments have struck deals to avert the levies, though White House officials say several are in the pipeline. And while the administration had set July 9 as the deadline to finalise pacts, investors largely expect that to be pushed back or countries given extra time. However, the president said Tuesday he was “not thinking about the pause” and again warned he would end negotiations or hike some duties.
“While markets suspect another last-minute climbdown, any renewed trade tension still poses a headwind for the dollar,” said Fawad Razaqzada, market analyst with City Index and FOREX.com. Investors were also tracking Trump’s signature budget bill, which faces an uncertain final vote in the US House of Representatives. Optimism over an extension to deep tax cuts has been offset by concerns it could add around $3 trillion to the US national debt.
In Europe, London’s FTSE-100 ended the day down 0.1 percent and the pound lost around one percent against the dollar on speculation over the future of British finance minister Rachel Reeves. Reeves appeared visibly upset in parliament a day after Prime Minister Keir Starmer’s Labour government U-turned over key welfare reforms, wiping out a multibillion-pound boost to public finances and triggering speculation that she could lose her job.
“The prospect of political turmoil is causing bond yields to rise. The market is pricing in the possibility of a replacement chancellor with a more left-leaning agenda, which is spooking the bond market and waking up the bond vigilantes from their slumber,” said Kathleen Brooks, research director at XTB. Brooks added that axing Reeves would be “a strange choice” from a market perspective.
Oil prices rose around one percent as crude-producer Iran suspended cooperation with the United Nations’ nuclear watchdog, days after a ceasefire in a war that saw Israeli and US strikes on nuclear sites in the Islamic republic.
On the corporate front Wednesday, shares in Tesla rose 4.4 percent despite reporting another hefty drop of 13.5 percent in auto sales, extending a difficult period amid intensifying electric vehicle competition and backlash over CEO Elon Musk’s political activities.
**Key figures at around 1530 GMT:**
New York – Dow: FLAT at 44,508.53 points
New York – S&P 500: UP 0.2 percent at 6,210.65
New York – Nasdaq: UP 0.7 percent at 20,340.77
London – FTSE 100: DOWN 0.1 percent at 8,774.69 (close)
Paris – CAC 40: UP 1.0 percent at 7,738.42 (close)
Frankfurt – DAX: UP 0.5 percent at 23,790.11 (close)
Tokyo – Nikkei 225: DOWN 0.6 percent at 39,762.48 (close)
Hong Kong – Hang Seng Index: UP 0.6 percent at 24,221.41 (close)
Shanghai – Composite: DOWN 0.1 percent at 3,454.79 (close)
Euro/dollar: DOWN at $1.1783 from $1.1806 on Tuesday
Pound/dollar: DOWN at $1.3614 from $1.3740
Dollar/yen: UP at 143.85 yen from 143.41 yen
Euro/pound: UP at 86.53 pence from 85.87 pence
Brent North Sea Crude: UP 1.0 percent at $67.77 per barrel
West Texas Intermediate: UP 0.8 percent at $65.98 per barrel
© 2024 AFP
