- Stocks Stabilize as Trump Open to Tariff Talks: Markets Wrap
Asian shares swung between small gains and losses as President Donald Trump left the door open for additional
trade negotiations after imposing new tariff rates on several countries. The MSCI regional stock benchmark
traded in a tight range amid gains in South Korea and Japan, countries that attracted a new level of levies.
Toyota Motor Corp. rose 0.5% along with other Japanese automakers as the yen held its losses. The won
strengthened, while a gauge of the dollar dipped 0.1%. The euro gained on a report the US offered a deal to
the European Union with a 10% tariff level. After announcing higher levies on several countries, Trump said
late Monday he was still open to additional negotiations and pushed off increased duties until at least Aug. 1.
The president also teased the possibility of additional negotiations and delays saying the notifications were
“not 100% firm.” - Dow slides more than 400 points Monday as new Trump tariffs incite sell-off
Stocks sold off to start the week Monday after President Donald Trump posted letters to countries indicating
new tariffs on imported goods. The Dow Jones Industrial Average tumbled 422.17 points, or 0.94%, and ended
at 44,406.36. The S&P 500 fell 0.79% to close at 6,229.98, and the Nasdaq Composite lost 0.92%, settling at
20,412.52. It was the worst day since mid-June for all three of the major averages. - Oil prices ease as traders assess U.S. tariffs, OPEC+ output hike
Oil prices eased on Tuesday after rising almost 2% in the previous session, as investors assessed new
developments on U.S. tariffs and a higher-than-expected OPEC+ output hike for August. Brent crude
futures dropped 21 cents at $69.37 a barrel by 0041 GMT. U.S. West Texas Intermediate crude fell 24 cents at
$67.69 a barrel. U.S. President Donald Trump on Monday began telling trade partners, which included major
suppliers South Korea and Japan as well as smaller U.S. exporters like Serbia, Thailand and Tunisia, that sharply
higher U.S. tariffs will start August 1, marking a new phase in the trade war he launched earlier this year.
Trump’s tariffs have prompted uncertainty across the market and concerns they could have a negative effect
on the global economy and, consequently, on oil demand. However, there are some signs current demand
remains strong, particularly in the U.S., the world’s biggest oil consumer, which has supported prices. A record
72.2 million Americans were projected to travel more than 50 miles (80 km) for Fourth of July vacations, data
from travel group AAA showed last week. Investors were bullish heading into the holiday period with data from
the U.S. Commodity Futures Trading Commission released on Monday showing money managers raised their
net-long futures and options positions in crude oil contracts in the week up to July 1. Regarding supplies, on
Saturday the Organization of the Petroleum Exporting Countries and allies, a group known as OPEC+, agreed
to raise production by 548,000 barrels per day in August, exceeding the 411,000-bpd hikes they made for the
prior three months. The decision removes nearly all of the 2.2 million-bpd of voluntary cuts and analysts at
Goldman Sachs expect OPEC+ to announce a final 550,000-bpd increase for September at the next meeting on
August 3. However, the actual output increase has been smaller than the announced levels so far and most of
the supply has been from Saudi Arabia, analysts said. - Gold holds ground as investors assess US tariff hike
Gold held steady on Tuesday after U.S. President Donald Trump unveiled higher tariffs on imports from Japan,
South Korea, and other nations, while a firm dollar and higher Treasury yields limited potential gains.
Spot gold was steady at $3,334 per ounce, as of 0220 GMT. U.S. gold futures remain unchanged at $3,344.20.
On Monday, Trump began telling trade partners that sharply higher U.S. tariffs would start on August 1,
marking a new phase in the trade war he launched earlier this year, with tariffs on goods from Japan and South
Korea set at 25%. Trump said the August 1 deadline for implementing the tariffs was firm but that he would
consider extensions if countries made proposals. “Reciprocal tariffs” were capped at 10% until July 9 to allow
for negotiations, but only agreements with Britain and Vietnam have been reached so far. “Trump’s latest tariff
letters are keeping gold in the frame for investors as an uncertainty hedge, but a resilient U.S. dollar and higher
bond yields are constraining the metal’s immediate upside potential,” KCM Trade Chief Market Analyst Tim
Waterer said. The yield on benchmark U.S. 10-year notes hovered near a two-week high, while the U.S. dollar
index steadied after reaching a one-week high in the prior session. Higher yields increase the opportunity cost
of holding non-yielding bullion, while a stronger dollar raises gold’s cost for holders of other currencies. Spot
silver edged down 0.1% to $36.78 per ounce. - Japan calls Trump’s latest tariff salvo ‘regrettable’ as nations scramble to deal with fresh deadline
U.S. President Donald Trump’s tariff letters that threaten steep duties on several countries, including key allies,
have led to “shock” and “regret” even as nations expressed optimism that negotiations would yield favorable
results. Japanese Prime Minister Shigeru Ishiba said the latest tariff announcement was “truly
regrettable,” while stressing that he would continue negotiations with the U.S. government, according to local
media reports. Japan is among the two nations set to to see an increase in the “reciprocal” tariff rate that
Trump had announced in April. Japanese imports into the U.S. will face a 25% levy, starting Aug. 1, according
to the White House, higher than the 24% announced earlier. At a meeting with cabinet ministers on Japan’s
strategy on tariffs, Ishiba noted that the Trump administration had proposed a plan to continue talks until the
August deadline. “Depending on Japan’s response, the content of the letter could be revised,” Ishiba said at
the meeting Tuesday morning, hours after Trump posted a copy of his tariff letters on social media platform
Truth Social. Meanwhile, South Korean leaders vowed to accelerate tariff negotiations with the Trump
administration to “swiftly resolve trade uncertainties,” Yonhap News reported, citing a statement from the
Ministry of Trade, Industry and Energy. Trump announced a 20% blanket tariff on imports from the country,
unchanged from his “reciprocal” tariff level announced in April. Yeo Han-Koo, South Korea’s trade minister,
also reportedly asked U.S. to lower tariffs on automobiles, steel and other goods for Korean companies in a
meeting with U.S. Commerce Secretary Howard Lutnick in Washington. Thai Finance Minister Pichai
Chunhavajira said Tuesday that he was “a little shocked” by the latest tariff rate but remained “confident” that
it will drop to levels similar to those on other countries, according to Reuters. Thailand faces a 36% tariff on its
exports to the U.S. — one of the steepest rates among the 14 nations Trump mentioned Monday — unchanged
from the April level. Malaysia, which saw its tariff rate rise to 25% from the previously threatened 24%, said it
will continue to engage with the U.S. to address outstanding issues. - Australia unexpectedly holds policy rate as it awaits more inflation data
Australia’s central bank held its policy rate at 3.85%, saying it needed more time to assess inflation data.
Economists polled by Reuters had been expecting a cut of 25 basis points to 3.6%. In its statement Tuesday,
the Reserve Bank of Australia said it was waiting for “a little more information to confirm that inflation remains
on track to reach 2.5 per cent on a sustainable basis.” “While recent monthly CPI Indicator data suggest that
June quarter inflation is likely to be broadly in line with the forecast, they were, at the margin, slightly stronger
than expected,” the central bank added. Australia’s inflation came in below expectations at 2.1% in May, the
lowest since October 2024. In the first quarter, inflation was at 2.4%, staying at a four-year low. Just after the
decision, Australia Treasurer Jim Chalmers said on X that the move by the RBA was “not the result millions of
Australians were hoping for or what the market or economists were expecting.”
He added that the country had made “substantial and sustained progress on inflation,” and touted his
government’s efforts to relieve the cost of living. Just after the data release, the S&P/ASX 200 index fell 0.24%,
while the Australian dollar strengthened 0.79%. Australia is currently struggling with a growth slowdown as
public spending shrinks and as consumer demand and exports weaken. The country recorded a 1.3%
expansion in the first quarter of the year, missing Reuters poll expectations of 1.5%. - Tariffs, declining real wages, slowing growth: Japan’s central bank has its work cut out
Real wages fell 2.9% in May year on year, sharper than the revised 2% drop in April and declining for a fifth
straight month. Wage data highlights that inflation could be taking a substantial bite out of incomes in Japan,
despite wages in the country rising. Bank of Japan faces a challenging scenario, with analysts differing in the
central bank’s path forward. - Tesla Inc. shares fell after Elon Musk announced he’s forming a new political party, the “America Party”,
which will focus on House and Senate seats for the next 12 months
Tesla’s stock slid 6.8%, with investors growing tired of the distraction from the company’s business. Musk’s
politicking has hurt Tesla’s standing with car buyers, with the stock declining 27% this year, and analysts are
calling for the company’s board to get involved to address the issue. - Shell Plc said second-quarter results will be undermined by a weaker performance from the energy giant’s
oil and gas trading operation
Earnings from the division are expected to be “significantly lower” quarter-on-quarter, the company said.
Shell’s in-house trading business is often one of its biggest profit boosters, and Chief Executive Officer Wael
Sawan said in March that its traders haven’t lost money in a single quarter over the past decade. Yet recent
price swings have been hard to navigate, with crude whipsawed by US President Donald Trump’s trade war,
OPEC+ policy and Israel’s attacks on Iran. The nature of last quarter’s volatility — driven more by geopolitics
than by supply and demand fundamentals — was challenging, a person familiar with the matter said. Shell slid
2.9%. European peers BP Plc and TotalEnergies SE, which also have large trading operations, fell too. - CrowdStrike slid 1.7% as Piper Sandler cut the software company to neutral from overweight after it
surpassed the investment bank’s price target
Piper Sandler analyst Rob Owens says he doesn’t see a near-term scenario that would meaningfully increase
numbers or its terminal multiple. Notes that Piper Sandler’s disposition toward CrowdStrike and its longer
term opportunity as a security and IT consolidator remains favorable. Says investors should not be adding
shares at this time as upside could be limited over the short to medium term. - Stellantis fell 4.9% as Bank of America cut the automaker to neutral from buy, with the broker expecting
to see a “very weak” first-half report on July 29
While the US appears strong, Stellantis’s positioning in Europe looks bad, BofA says. Analyst Horst Schneider
says that while Stellantis shares have fallen around 30% year to date and more than 50% since last summer’s
capital markets day, it is “too early for ‘bottom-fishing’”. Says Stellantis is facing tough competition on EVs in
Europe; company is missing a catalyst and fears both weak 1H and 2H results. “Our group adj. EBIT estimate is
c35% below cons. for FY25e and c10% below for FY26e. It will take a while before results improve. FY25 is a
year of transition,” Schneider writes. Still, among positives, expects earnings to grow again and that there is
“little downside left for the share price;” also sees strategic options following a restructuring of the company’s
brand portfolio.
