Stock Market on the Rise: Anticipated Tariffs Boost Confidence - Indices Surge, Shares Gain Momentum
In a day marked by contrasting fortunes, global stock markets displayed a mix of volatility and growth, with the U.S.-EU trade tensions remaining a significant concern, while the U.S.-Japan trade deal brought a ray of hope to investors.
The U.S.-EU trade conflict, which has been tense for some time, continues to loom large with the potential for tariffs to increase to 30% on EU goods. However, ongoing negotiations are aiming to reach a compromise, with both parties reportedly considering a 15% tariff level [1][3]. The EU, in response, is preparing retaliatory tariffs worth €100 billion if no deal is reached [5].
The U.S.-Japan trade deal, announced recently, has had a positive impact on the market. The deal reduces tariffs on Japanese autos to 15% and includes Japan committing to significant investments and agricultural purchases in the U.S. [2][4]. This development has lifted European and Asian stocks, especially automakers, with the Euro STOXX 600 rising 1% and shares in the UK hitting record highs following the announcement [2]. Analysts view this deal as improving trade clarity and fueling hopes that similar agreements with the EU might avoid the harsher tariff hikes planned for August 1 [2][4].
Individual stocks also made headlines on Wednesday. GE Vernova's stock surged nearly 15 percent due to strong earnings and a more optimistic annual outlook [6]. AT&T's stock rose by 1.2 percent due to slightly better quarterly earnings and higher investments [7]. However, Texas Instruments' dismal outlook caused significant stock loss, weighing on the market. The semiconductor giant lost more than 13 percent due to a dismal outlook [8].
GoPro and Krispy Kreme, among meme stocks, experienced significant volatility. GoPro's stock surged more than 40 percent at one point but significantly evaporated by the end of the day [9]. Krispy Kreme's stock also made headlines, surging more than 40 percent at one point [10].
The S&P 500 continued its record-breaking streak, gaining 0.78 percent, reaching a new record high of 6,358.91 points [5]. The Nasdaq 100, which initially traded in negative territory, ended the day with a 0.43 percent increase, reaching 23,162.41 points [11]. The Dow Jones Industrial Average (DJIA) rose by 1.14 percent to 45,010.29 points, marking the first time it surpassed the 45,000-point mark since January [12].
The situation remains dynamic, with the outcomes of final talks before the August 1 deadline likely to have a significant impact on global markets. German Chancellor Friedrich Merz hinted at a possible decision in the transatlantic trade conflict in the evening, but no new information about the agreements with Japan or Merz was provided [13].
[1] Source: Reuters [2] Source: CNBC [3] Source: Politico [4] Source: Wall Street Journal [5] Source: Bloomberg [6] Source: CNBC [7] Source: MarketWatch [8] Source: CNBC [9] Source: MarketWatch [10] Source: CNBC [11] Source: MarketWatch [12] Source: CNBC [13] Source: Reuters
The ongoing trade negotiations between the U.S. and the EU could potentially impact the finance investing business, as both parties consider a 15% tariff level and retaliatory measures may be imposed by the EU. On the other hand, the recently announced U.S.-Japan trade deal has boosted the business sector, with the investment promise from Japan and reduced tariffs on Japanese autos to 15%.
