- Oil prices edge lower with trade talks in focus: Markets Wrap
Oil prices fell for the fourth consecutive session on Wednesday, as investors assessed trade developments
including a U.S. tariff deal with Japan ahead of a U.S. stocks data announcement. Brent crude futures fell 8
cents to close at $68.51 a barrel. U.S. West Texas Intermediate crude futures lost 6 cents to settle at $65.25
per barrel. Both benchmarks lost about 1% in the previous session after the EU said it was
considering countermeasures against U.S. tariffs. President Donald Trump said on Tuesday that the U.S. and
Japan had struck a trade deal that included a 15% tariff on U.S. imports from Japan. In another bullish sign for
the crude market, the U.S. energy secretary said on Tuesday that the U.S. would consider sanctioning Russian
oil to end the war in Ukraine. - S&P 500 and Nasdaq rally to record highs on optimism about trade deals
The S&P 500 and Nasdaq notched record high closes on Wednesday, lifted by Nvidia and GE Vernova, as the
European Union and the U.S. appeared headed toward a trade deal similar to an agreement President Donald
Trump struck with Japan. The White House’s deal with the European Union would include a broad tariff of 15%
on EU goods imported into the U.S., two diplomats said. The rate, which could also extend to cars, would mirror
the framework agreement the U.S. has struck with Japan. - Gold extends losses as U.S. and EU close in on tariff deal; silver rallies
Gold prices extended losses on Wednesday following reports that the U.S. and European Union were closing
in on a 15% tariff deal, dampening safe-haven demand, while silver earlier surged to its highest level since
September 2011. Spot gold was down 1.3% at $3,387.67 per ounce after hitting its highest point since June 16
earlier in the day. U.S. gold futures slipped 1.4% to $3,396.9. The European Union and the United States are
moving toward a trade deal that would impose a broad 15% tariff on EU goods imported into the U.S., two
diplomats said on Wednesday. This comes as U.S. President Donald Trump also reached a trade deal with Japan
on the same day to lower tariffs on auto imports, offering a welcome sign of progress in his broader tariff
negotiations on multiple fronts. - 10-year Treasury yield ticks higher after Bessent reassures market over Powell’s position
Treasury yields moved slightly higher on Wednesday after U.S. Treasury Secretary Scott Bessent eased market
jitters over instability at the top of the Federal Reserve, turning attention back to the interest rate outlook. The
benchmark 10-year Treasury yield was trading 5 basis points higher at 4.386%, while the 2-year yield rose more
than 5 basis points to 3.884%. The 30-year yield added 4 basis points to 4.943%. Bessent on Tuesday said that
Fed Chair Jerome Powell does not need to resign, but reiterated calls for a review of the institution. Powell
declined to give more details on the outlook during Fed conference remarks on Tuesday, instead focusing on
banking regulation. - Trump to visit Federal Reserve, escalating campaign against Chair Powell
U.S. President Donald Trump will visit the Federal Reserve on Thursday, the White House said, escalating his
pressure campaign against Chairman Jerome Powell. This is the first time in nearly two decades that an
American president will be making an official trip to the central bank. American presidents have traditionally
respected the independence of the central bank, which is insulated both in law and in practice from the political
whims of elected officials. Trump’s visit is a remarkable symbolic move on that independence, bringing his
drumbeat of criticism over Powell’s refusal to lower interest rates right to the chairman’s doorstep. The White
House released a schedule on Wednesday that said Trump would visit the Federal Reserve at 4:00
p.m. ET on Thursday. - Keir Starmer and Narendra Modi to sign UK-India trade deal
UK Prime Minister Sir Keir Starmer and his Indian counterpart Narendra Modi will on Thursday sign a trade deal
between the two countries that London believes will boost British exports to India by 60 per cent by 2040. The
agreement, first announced in May, means tariffs on more than 90 per cent of UK exports to India will be cut,
with the largest reductions on cosmetics, clothes and food and drink — albeit phased in over a decade.
Ministers said the deal was expected to eventually benefit the UK economy by £4.8bn a year.
The tariff reductions include immediate cuts on UK exports of salmon, lamb and machinery, and gradual
liberalisation of trade in chocolates, cosmetics and auto parts. The biggest winners for UK industry are whisky
and gin producers, which will see tariffs halve to 75 per cent immediately and then fall to 40 per cent by the
10th year of the deal. India has also agreed a historic cut in automobile import duties — from more than 100
per cent to just 10 per cent — although that has been capped by quotas that will be announced on Thursday. - Ursula von der Leyen tells Xi Jinping EU-China ties are at ‘inflection point’
European Commission President Ursula von der Leyen has warned Chinese leader Xi Jinping that relations were
at “an inflection point” as the sides held a summit fraught by tensions over trade and the war in Ukraine. Von
der Leyen and European Council President António Costa opened a one-day meeting in Beijing by demanding
“real solutions” to long-standing complaints including China’s wide trade surplus with the bloc and its backing
of Moscow. Xi said that relations were at a “critical juncture” and that the EU and China should “make the right
strategic choices” amid “a changing and turbulent world”. Von der Leyen and Costa will hold talks and a working
lunch with Xi on Thursday, followed by a meeting and banquet with premier Li Qiang, China’s number two
official. Von der Leyen will hold a press conference later on Thursday. The summit, which will mark half a
century of EU-China relations, comes as hopes for a reset have been overshadowed by thorny issues including
trade, Beijing’s export controls on critical minerals and the Russia-Ukraine war. - South Korea avoids technical recession as GDP expands 0.6% in second quarter
South Korea avoided a technical recession as its economy expanded by 0.6% from the previous quarter, beating
expectations, according to advance estimates. This was higher than the 0.5% expected by economists polled
by Reuters, and a reversal from the 0.2% contraction seen in the first quarter. Data from the Bank of
Korea showed exports of both goods and services grew strongly in the second quarter, rising 4.2% quarter over
quarter as shipments of semiconductors, petroleum products, and chemical products increased. - Tesla reports sales miss as auto revenue drops for second straight quarter
Tesla reported a 16% decline in automotive revenue as sales fell for a second straight quarter and again trailed
analysts’ estimates. Tesla shares dipped by more than 4% after hours, following remarks by CEO Elon Musk and
finance chief Vaibhav Taneja about higher tariff costs and the expiration of federal electric vehicle tax credits.
“We probably could have a few rough quarters. I am not saying that we will, but we could,” Musk said. Auto
revenue for Tesla came in at $16.7 billion in the second quarter, down from $19.9 billion in the same quarter
last year. Of that sum, revenue from sales of auto regulatory credits declined to $439 million from $890 million
a year earlier. The company’s shares were down about 18% for the year as of Wednesday’s close, making it
the worst performance among tech’s Mega caps. - Alphabet beats earnings expectations, raises spending forecast
Alphabet reported second-quarter results on Wednesday that beat on revenue and earnings, but the company
said it would raise its capital investments by $10 billion in 2025. The company’s overall revenue grew 14% year
over year, higher than the 10.9% Wall Street expected, but Alphabet is going to spend more on artificial
intelligence in 2025 than it anticipated. In February, the company said it expected to invest $75 billion in capital
expenditures in 2025 as it continues to expand on its AI strategy. That was already above the $58.84 billion
Wall Street expected at the time. The company increased that figure on Wednesday to $85 billion, saying it
was raising it due to “strong and growing demand for our Cloud products and services.” Alphabet’s net income
increased to $28.20 billion, up nearly 20% from the previous year. - IBM shares drop as software revenue misses
IBM’s revenue increased nearly 8% year over year in the quarter, according to a statement. Growth in the first
quarter was below 1%. Net income, which includes costs related to acquisitions, rose to $2.19 billion, or $2.31
per share, from $1.83 billion, or $1.96 per share, a year ago. “While not a major factor overall, geopolitical
tensions are prompting a few clients to move cautiously,” CEO Arvind Krishna said on a conference call with
analysts. “U.S. federal spending was also somewhat constrained in the first half, but we do not expect it to
create long term headwinds.” Software revenue climbed about 10% to $7.39 billion, falling short of the $7.43
billion consensus among analysts surveyed by StreetAccount. Hybrid cloud revenue, including Red Hat, showed
16% growth. The software unit’s gross margin of 83.9% was barely narrower than StreetAccount’s 84.0%
consensus. - India’s JSW to launch EV brand in 2027 with China’s Chery support
India’s JSW Group plans to launch its own electric vehicle brand by 2027 with technical and component support
from China’s Chery Automobile Co. The agreement includes a one-time technology transfer fee and recurring
royalties to Chery, though no equity partnership is involved, in line with India’s restrictions on Chinese
investment in sensitive sectors. If confirmed, the deal would mark the first significant transfer of passenger
vehicle technology from a Chinese automaker to an Indian firm since the 2020 border clashes. Billionaire Sajjan
Jindal’s JSW is reviewing models from Chery’s iCar range and plans to manufacture EVs in Maharashtra from 2027.
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