- Asia-Pacific markets trade mixed as investors assess BOJ rate decision and fresh tariffs on India, South
Korea: Markets Wrap
Asia-Pacific markets traded mixed Thursday as investors assessed the Bank of Japan’s decision to stand pat on
short-term interest rates at 0.5% for the fourth consecutive time, in line with expectations. Investors are also
evaluating the U.S.′ blanket 15% tariffs on imports from South Korea and 25% duties on imports from India,
along with an unspecified “penalty.” South Korean auto stocks plunged Thursday after U.S. President Donald
Trump imposed a blanket 15% tariff on imports from the country including autos, which he had threatened
with a 25% tariff earlier. Chinese and Hong Kong stocks started the day lower Thursday, following mixed trading
in the other key Asia-Pacific markets. - S&P 500 closes lower, Dow drops more than 150 points as Powell signals Fed isn’t ready to cut rates
The S&P 500 gave up earlier gains and closed lower on Wednesday after Federal Reserve Chair Jerome
Powell signalled the central bank isn’t ready to cut rates, as it assesses the impact of President Donald Trump’s
higher tariffs on the inflation picture. The broad market index slipped 0.12% and closed at 6,362.90. The Dow
Jones Industrial Average fell 171.71 points, or 0.38%, closing at 44,461.28. The Nasdaq Composite gained
0.15% and ended at 21,129.67. At their session highs, the S&P 500 was up by as much as 0.4%, while the Dow
was up 0.2%. Powell said that the central bank has “made no decisions” about a potential policy change in
September. - Gold falls as Federal Reserve holds key interest rate steady
Gold fell on Wednesday as the Federal Reserve held interest rates steady at its July meeting, while solid U.S.
economic data increased the likelihood that rate cuts may be pushed back for the remainder of the year. Spot
gold was down 0.7% at $3,301.82 per ounce. U.S. gold futures fell 0.9% to $3,352.3. The U.S. central bank left
rates unchanged on Wednesday, resisting pressure from U.S. President Donald Trump’s repeated calls for cuts.
The federal funds rate will continue to be set in a range between 4.25% to 4.5%. - Oil rises 1% as investors weigh Trump’s Russia stance, tariff threats
Oil prices climbed 1% on Wednesday as investors focused on developments on U.S. President Donald Trump’s
tighter deadline for Russia to end the war in Ukraine and his tariff threats to countries that trade its oil.
Brent crude futures rose 73 cents, or 1.01%, to close at $73.24 a barrel. U.S. West Texas Intermediate crude
gained 79 cents, or 1.14%, to settle at $70 with investors largely shrugging off mixed U.S. data on crude and
fuel inventories. Both contracts had fallen nearly 1% earlier in the day. - Dollar advances against peers after strong GDP data, Fed holds key interest rate steady
The dollar advanced against major peers on Wednesday following better-than-expected U.S. GDP data and as
the Federal Reserve held interest rates steady at its July meeting. The Federal Reserve left interest rates
unchanged, rebuffing persistent calls by President Donald Trump to cut interest rates. The federal funds rate
will continue to be set in a range between 4.25% to 4.5%. At a news conference on Wednesday afternoon,
Federal Reserve Chair Jerome Powell said that no decision has been made for September and that the central
bank must wait and see the impact of tariffs before acting. The euro extended losses against the dollar. It was
down 0.5% to $1.1493, on track for the fifth straight session of losses and trading at its lowest level since June.
The dollar index added to it’s gains, up 0.4% at 99.29, on course to post it’s first month of gains this year. - Divided Fed holds key interest rate steady, defying Trump’s demands for aggressive cuts
A divided Federal Reserve on Wednesday voted to keep its benchmark interest rate steady, despite a barrage
of criticism from President Donald Trump and dissents from two top officials. The Federal Open Market
Committee, the group that sets the overnight borrowing rate, voted 9-2 to stay on hold. The federal funds rate
will continue to be set in a range between 4.25%-4.5%. The post-meeting statement offered only a couple
changes in how the committee views economic conditions. “Although swings in net exports continue to affect
the data, recent indicators suggest that growth of economic activity moderated in the first half of the year,” the
document stated. “The unemployment rate remains low, and labour market conditions remain solid. Inflation
remains somewhat elevated.” At the June meeting, the committee had a more optimistic view, saying the
economy “continued to expand at a solid pace.” - Trump announces 25% tariff on India plus ‘penalty’ for trade with Russia
President Donald Trump said Wednesday that India will pay a tariff of 25% beginning Aug. 1, in addition to a
“penalty” for what he views as unfair trade policies and for India’s purchase of military equipment and energy
from Russia. The 25% tariff rate is modestly lower than what he imposed on India on “liberation day,” when he
announced a 26% rate on the key trading partner. But it’s still on the higher end of what Trump appeared to
be considering for India. Trump on Tuesday said he was considering a rate between 20% and 25%. - U.S. and South Korea strike a trade deal with tariffs on Seoul set at 15%
U.S. President Donald Trump on Wednesday announced that Washington had reached a “Full and Complete”
trade deal with Seoul, setting blanket tariffs on the country’s exports to U.S. at 15%. This deal means that duties
will be lowered from the 25% that Trump had threatened in his “tariff letter” to Seoul earlier this month. Tariffs
on the country’s auto exports set at 25% will also be cut to 15%. Trump also said in his post on social media
platform Truth Social that South Korea “will give to the United States $350 Billion Dollars for Investments
owned and controlled by the United States, and selected by myself, as President.” There appeared to be a
difference in the interpretation between Seoul and Washington on how that amount would be utilized. - China’s July manufacturing activity contracts more than expected — declines for fourth-straight month
China’s official gauge for manufacturing activity on Thursday pointed to a worse-than-expected contraction in
July amid slower economic growth and ongoing U.S. trade tensions. China’s official manufacturing PMI has
been below the 50 mark, reflecting contraction rather than expansion, since April. Tensions between the
world’s two largest economies escalated in April with each side imposing tariffs of more than 100% on imports
of goods from the other. The two sides agreed in May to roll back most of the additional duties for 90 days,
bringing the effective rate for China exports to the U.S. to around 43%. The truce is set to expire in mid-August.
Representatives from the world’s two largest economies ended a meeting in Stockholm this week without
announcing an extension of the agreement, which had been widely expected. - Trump slaps universal 50% tariff on copper imports; metal’s price plunges
President Donald Trump on Wednesday signed on order imposing a universal 50% tariff on copper imports, the
latest metal he has targeted with a steep import tax. U.S. copper prices plunged as much as 18% in after-hours
trading as soon as the White House announced the new tariff rate. Copper miners Freeport
McMoRan and Southern Copper were down about 10% and more than 6%, respectively. The sell-off, if it holds
through Thursday’s trading session, will mark the metal’s largest single-day decline since 1989. The new, higher
copper tariffs go into effect Friday, according to a fact sheet released by the White House. - Microsoft stock pops 9% on earnings beat as Azure annual revenue tops $75 billion
Microsoft shares jumped 9% in extended trading on Wednesday after the company reported better-than
expected earnings and revenue for the fiscal fourth quarter. Microsoft’s finance chief, Amy Hood, called for
$74.7 billion to $75.8 billion in fiscal first-quarter revenue. The middle of the range, at $75.25 billion, surpassed
LSEG’s $74.09 billion consensus. The company sees 37% Azure growth at constant currency. Hood said
Microsoft sees over $30 billion in fiscal first quarter capital expenditures and assets acquired through finance
leases, which would work out to annual growth above 50%. Capital expenditures will grow in the new fiscal
year, but more slowly than in the 2025 fiscal year that ended in June, Hood said. - Meta shares climb 10% on revenue beat, raised forecast
Meta shares jumped more than 10% after the company reported second-quarter earnings on Wednesday that
beat on revenue. The company’s advertising revenue for the second quarter came in at $46.56 billion, ahead
of Wall Street projections of $43.97 billion. On a call Wednesday with analysts, CEO Mark Zuckerberg said
Meta’s artificial intelligence technology unlocked “greater efficiency and gains across our ad system.” Meta
said third-quarter sales will come in the range between $47.5 billion and $50.5 billion, ahead of Wall Street
estimates of $46.14 billion. The company said capital expenditures will come in between $66 billion and $72
billion, raising the low end of the company’s previous estimate of between $64 billion and $72 billion. Meta’s
total costs and expenses for the second quarter were $27.08 billion, which was a 12% year-over-year increase. - Qualcomm beats on earnings, highlights growth in Meta smartglasses
Qualcomm reported fiscal third-quarter earnings on Wednesday that beat Wall Street expectations and
provided a stronger-than-expected guide for the current quarter. Qualcomm shares slid in extended trading.
In the current quarter, Qualcomm said it expected $2.85 per share at the midpoint of adjusted earnings on
$10.7 billion in revenue at the midpoint. Net income during the quarter ending in June was $2.66 billion, or
$2.43 per share, versus $2.13 billion, or $1.88 per share a year ago. Qualcomm’s most important business is
selling chips for smartphones under its Snapdragon brand, including the central processor and modem for high
end devices made by Samsung. It also provides modems to Apple. Its handset chip business reported $6.33
billion in revenue during the quarter, just shy of Wall Street expectations of $6.44 billion. Qualcomm expects
to lose Apple as a customer for its modem business in the coming years. - Arm shares slip as smartphone royalties disappoint
Arm Holdings shares dipped as much as 9% in after-hours trading on the company’s first
quarter earnings results Wednesday. Arm sells architecture for making chips that power billions of devices,
including Apple and Qualcomm’s chips. However, CEO Rene Haas said in a Wednesday interview with Reuters
that the company was “consciously deciding to invest more heavily” in technology “beyond designs,”
confirming the company is considering designing its own processors. Arm’s customers include CSPs or cloud
service providers like Microsoft and Amazon that are developing custom chips based on Arm. OEMs, or original
equipment manufacturers, are companies like Apple that design their own computers. - Albemarle posts surprise second-quarter profit on lithium demand; shares surge
Albemarle, the world’s largest producer of lithium for rechargeable batteries, posted a surprise second-quarter
profit on Wednesday, helped by sustained demand for the metal, sending its shares up over 6% after the bell.
Lithium’s use in electric vehicles, large-scale battery storage and other electronic applications has grown
rapidly, with demand up 24% last year and likely to grow 12% annually for the next decade. Albemarle said its
net sales came in at $1.33 billion during the quarter, 7% lower than last year but still above analysts’
expectations of $1.22 billion, according to data compiled by LSEG. Its revenue fell year-over-year as a result of
lower pricing, which was offset by volume growth in its energy storage and specialties business segments. To
weather the pricing glut, Albemarle has taken measures such as job cuts and cancelling expansion projects –
including a key U.S. lithium refinery. - iPhone maker Foxconn joins $1 trillion AI data centre market with new alliance
Foxconn will take a 10% stake in TECO as the result of a share exchange. TECO started life as a engine maker
for cars but has since extended into areas such as electric vehicles, energy storage and data centre
construction. Foxconn meanwhile, which assembles Apple’s iPhone and is a key partner for Nvidia,
manufactures server racks designed for AI workloads. The two companies are now teaming up to bring their
expertise together to effectively create a one-stop-shop for anyone looking to set up an AI data centre. The
assembly of AI servers has become a key focus as Foxconn looks to diversify its revenue beyond the
manufacturing of consumer electronics.
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