The US is currently entangled in trade negotiations with multiple countries including India and the European Union (EU), talks with the latter being in a deadlock. As potentially discouraging news reports arrive on the American economy, the Wall Street’s recent rally lost some momentum, driving up global shares on Thursday.
France’s CAC 40 added 0.3 per cent in early trading to 7,826.43, while the German DAX rose 0.5 per cent to 24,378.64. Then there was Britain’s FTSE 100 that rose 0.1 per cent to 8,811.29. The future for the Dow Jones Industrial Average was up 0.2 per cent. The future for the S&P 500 gained nearly 0.1 per cent.
In Asian trading, there was nothing to rave about as Japan’s benchmark Nikkei 225 shed 0.5 per cent to finish at 37,554.49, while Australia’s S&P/ASX 200 was little changed at 8,538.90.
In South Korea, the Kospi jumped 1.5 per cent to 2,812.05 after the country’s new president and leading liberal politician Lee Jae-myung began his term, vowing to restart talks with North Korea and beef up a trilateral partnership with the US and Japan.
Hong Kong’s Hang Seng gained 1.1 per cent to 23,906.97, while the Shanghai Composite rose 0.21 per cent to 3,384.10.
A recent report citing activity contraction last month for US retailers, finance companies and other businesses in the services industry has furthered impacted the markets. Economists were rather dismayed since they had been expected to see growth. A survey by the Institute for Supply Management on businesses made it clear that the uncertainty surrounding tariff war was making it difficult for them to forecast and plan.
Another report from ADP suggested US employers outside of the government hired far fewer workers last month than economists expected. That could bode ill for Friday’s more comprehensive jobs report coming from the US Labour Department, which is one of Wall Street’s most anticipated data releases each month.
So far, the US job market has remained remarkably resilient despite years of high inflation and the current threat of President Donald Trump’s high tariffs. But weakness there could undermine the rest of the economy.
Expert analysis is expecting the Federal Reserve to cut interest rates later this year to rev up the US economy, which in turn caused the fall for Treasury yields. The weaker-than-expected ADP report also led Trump to urge Fed Chair Jerome Powell to deliver cuts to rates more quickly.
On his social media platform Truth Social, Trump posted: “Too Late’ Powell must now LOWER THE RATE. He is unbelievable!!!”
The Fed is waiting to see how much Trump’s tariffs will hurt the economy and raise inflation before it announces more rate-cuts after it slashed them towards the end of 2024. While lower interest rates could boost the economy, they could also give inflation more fuel.
Investors are fervently hoping for deals that will lower Trump’s tariffs. The EU’s top trade negotiator, Maroš Šefcovic, met his American counterpart, US Trade Representative Jamieson Greer, on the sidelines of a meeting of the Organisation for Economic Cooperation and Development in Paris on Wednesday.
In other dealings early Thursday, benchmark US crude fell 14 cents to USD 62.71 a barrel. Brent crude, the international standard, edged down 4 cents to USD 64.82 a barrel.
The US dollar rose to 143.27 Japanese yen from 142.78 yen. The euro cost USD 1.1413, little changed from USD 1.1418.
Follow us
