By Mike Dolan
LONDON (Reuters) – What matters in U.S. and global markets today
By Mike Dolan, Editor-At-Large, Finance and Markets
Wall Street and global stocks rose on Thursday, as Apple’s domestic investment push, dovish noises on interest rates and a generally upbeat earnings season trumped chip stock hits and the arrival of the U.S. tariff day.
The day’s diary is topped by a likely Bank of England interest rate cut and U.S. weekly jobless numbers that take on unusual importance in light of last week’s July payrolls confusion.
* Stocks in Asia and Europe pushed higher even as U.S. tariffs were introduced, with Shanghai’s index hitting its highest since 2021 following above-forecast Chinese import and export numbers for July. Although eight major trading partners accounting for about 40% of U.S. trade flows have reached framework deals to reduce tariffs to 15% or less, imports from Brazil, India, Switzerland and Canada face rates of 35% to 50%. Though, Taiwan and South Korea are breathing sighs of relief following exemptions from 100% chip import levies.
* Expectations for Federal Reserve easing as soon as next month were buoyed again as two regional Fed chiefs – Minneapolis Fed boss Neel Kashkari and San Francisco’s Mary Daly – indicated more rate cuts were coming this year. President Donald Trump said on Wednesday he would likely appoint a temporary replacement to Adriana Kugler’s vacant Fed board seat. Meanwhile, candidates to replace Chair Jerome Powell next year are likely down to three, including former Fed Governor Kevin Warsh and White House adviser Kevin Hassett.
* Fed easing speculation knocked the dollar back to 10-day lows, with Treasury yields remaining close to the week’s three-month lows despite another underwhelming 10-year auction overnight and a long bond sale later today. Sterling was slightly firmer against the dollar but down on the euro, as the BoE looks set to lower British rates by a quarter point to 4% later today.
Make sure to check out today’s column, where I argue that investors looking for the impact of Trump’s tariffs are looking at the wrong earnings season.
Today’s Market Minute
* President Donald Trump’s higher tariff rates of 10% to 50% on dozens of trading partners kicked in on Thursday, testing his strategy for shrinking U.S. trade deficits without massive disruptions to global supply chains, higher inflation and stiff retaliation from trading partners.
* Indian Prime Minister Narendra Modi said on Thursday he will not compromise the interests of the country’s farmers even if he has to pay a heavy price, in his first comments after Trump’s salvo of a 50% tariff on Indian goods.
* Russian President Vladimir Putin and U.S. President Donald Trump will meet in the coming days, Kremlin aide Yuri Ushakov said on Thursday, in what would be the first summit between leaders of the two countries since 2021.
* Markets’ relatively speedy acceptance of higher tariffs and threats to institutional independence raises the question: What happened to the last 40 years of economic orthodoxy? ROI columnist Jamie McGeever asks whether the Washington Consensus has been broken.
* The U.S.-EU trade deal has been heavily criticised as a capitulation by the bloc. But Panmure Liberum investment strategist Joachim Klement argues that the European Union is likely not only to suffer less than the U.S. but may even see its economy benefit from the new global tariff regime.
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Chart of the day
Trump said on Wednesday that the United States would impose a tariff of about 100% on imports of semiconductors but offered up a big exemption – it will not apply to companies that are manufacturing in the U.S. or have committed to do so. South Korea’s top trade envoy said major chipmakers Samsung Electronics and SK Hynix would not be subject to the 100% levies.
Taiwanese chip contract manufacturer TSMC was expected to be relatively unscathed as it has U.S. factories, so key customers such as Nvidia are unlikely to face increased tariff costs for U.S-made chips. Malaysia’s trade minister Tengku Zafrul Aziz warned parliament his country would risk losing a major market in the United States.
Today’s events to watch
* Bank of England policy decision and monetary policy report (7:00 AM EDT), with press conference from BoE Governor Andrew Bailey
* U.S. weekly jobless claims (8:30 AM EDT), Q2 labor costs and productivity, June consumer credit (3:00 AM EDT); Mexico July inflation (8:00 AM EDT)
* Mexico central bank policy decision (3:00 PM EDT)
* Atlanta Federal Reserve President Raphael Bostic speaks
* U.S. corporate earnings: Eli Lilly, Gilead, Zimmer Biomet, Warner Bros Discovery, Expedia, ConocoPhillips, Sempra, Constellation Energy, Alliant Energy, Evergy, Consolidated Edison, Motorola Solutions, Microchip Technology, GenDigital, Ralph Lauren, Monster Beverages, Block, GoDaddy, Live Nation, Wynn Resorts, Trade Desk, EOG,
* U.S. Treasury auctions $25 billion of 30-year bonds
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Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.
(by Mike Dolan; editing by Alex Richardson)
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