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Investors react to tariff developments as stocks and yen continue to fall.

The major stock indexes were little altered on Tuesday, as investors digested Donald Trump's latest tariff announcement. Meanwhile, the yen continued its decline against the dollar due to planned 25% duties on Japanese goods. Trump wrote to 14 countries on Monday, including Japan and South Korea. He warned them that they would face a sharply increased tariff rate for imports from the United States, starting at a new date, August 1.

The market has not reacted as strongly as it did in April after Trump announced his sweeping tariffs. Market watchers predict that countries will seek to reach trade agreements with the United States prior to the new deadline. Sources said that European stocks were stable, and the European Union would not receive a letter stating higher tariffs. The EU could also reach a deal with the United States by Wednesday.

It's a slow day. Yesterday, people digested tariff news and we saw weakness. "People are on hold for now until the second-quarter earnings report is released," said Peter Tuz of Chase Investment Counsel, Charlottesville, Virginia.

S&P 500 companies are soon to report on the quarter ending June 30.

The Dow Jones Industrial Average dropped 101.09 points or 0.23% to 44,305.27. The S&P 500 declined 2.26 points or 0.04% to 6,227.72. And the Nasdaq Composite increased 1.33 points or 0.01% to 20,413.83.

The MSCI index of global stocks fell by 0.36 points or 0.04% to 919.57. The pan-European STOXX 600 rose by 0.33%.

The hope of a trade deal boosted risk appetite on Tuesday, as MSCI’s broadest Asia-Pacific index outside Japan rose by 0.5%. Japan's Nikkei recovered from its early losses and ended the day 0.26% higher. Southeast Asia's largest economies are facing some of the highest U.S. Tariffs. South Korean shares posted their biggest daily gain in the past two weeks, and the won strengthened by 0.4%.

Since Trump in April capped what he termed reciprocal tariffs for trading partners to 10% for a period of three months, allowing for negotiation, the lack of progress has been looming over markets. Two agreements have been made, with Britain, and Vietnam. In June, Washington, and Beijing, agreed on a framework for tariff rates. The minutes of the Federal Reserve's last meeting will be published on Wednesday. The central bank is taking a wait and see approach to monetary policies.

The export-dependent Japanese currency, the yen, fell to a two-week-low of 146.65 against the dollar. It also fell against other currencies. The dollar's last gain against the yen was 0.6%, at 146.9.

The Australian dollar rose as the central bank of Australia defied expectations by keeping its cash rate at 3.85%.

Investors are awaiting Treasury's sale of $119 billion of coupon-bearing bonds this week. The yield on the benchmark U.S. 10 year notes rose 3.6 basis points to 4.431% last week, its highest level since June 20,

U.S. crude oil rose by 0.19%, to $68.06 per barrel. Brent increased to $69.86 a barrel.

(source: Reuters)