Stocks Fall Worldwide Amid Tariff Concerns and U.S. Economic Slowdown
Global stock markets declined on Wednesday, as traders’ fears about the U.S. and global economy worsened. The Dow was down a tad, the S&P 500 dropped 0.5%, and the Nasdaq slipped by nearly 0.7%. In Asia, trading was mixed. Shares in Asia fell too, with Japan’s Nikkei dropping 0.2% and MSCI’s broadest index of Asia-Pacific shares outside Japan dipping 0.2%. Chinese blue-chip stocks and the Hang Seng in Hong Kong are flat. These moves showed investors were worried about how ongoing trade tensions and slow economic growth might hurt business.
Tariffs Hit U.S. Companies and Consumer Spending
New economic data showed that the U.S. service sector did not grow in July, hiring declined, and business costs soared due to tariffs. Large corporations have started to feel the pressure. Yum Brands (which owns Taco Bell) reported weaker-than-expected profits, and Caterpillar warned that tariffs could cost up to $1.5 billion. President Trump said that new tariffs on semiconductors and chips will be introduced soon. He also stated that the U.S. would initially impose a small tariff on pharmaceutical imports before increasing it significantly in coming years.
U.S.-China trade talks could resume shortly, with a potential meeting between Trump and President Xi Jinping. Meanwhile, relations with India are also strained, as Trump warned New Delhi of “punishment” if it continues its oil trade with Russia.
Dollar Steadies, Rate Cut Bets Mount
The dollar remained steady at 98.821 after slipping on Friday. Traders are pricing in a 94% chance that the Federal Reserve will cut interest rates in September, according to CME’s FedWatch tool. Another rate cut later this year is also widely anticipated.
The key issue now is who President Trump will appoint to the Federal Reserve’s leadership team. While he ruled out former Treasury Secretary Scott Bessent as a replacement for current Fed Chair Jerome Powell, markets remain alert for any potential shifts in policy direction.
Oil, Gold, and Bonds React to Uncertainty
After dropping for four days, oil prices rebounded slightly. Brent crude topped $67.78 a barrel, and U.S. crude hit $65.3. Gold prices were at $3,381 an ounce. U.S. Treasury yields rose, too, with the U.S. set to sell $96 billion in upcoming bond auctions. The 2-year yield was at 3.7284%, and the 10-year was at 4.2198%.
Crude gains Thursday come ahead of President Donald Trump’s high-stakes meeting with Russian President Vladimir Putin, as energy traders watch for relations between the world’s two largest oil producers to affect global supply.
