2 days ago
3
By Stan Choe
July 24, 2025 — 5.23am
US stocks are ticking toward another record following a trade deal between the world’s No. 1 and No. 4 economies, one that would lower proposed tariffs on Japanese imports coming to the United States.
The S&P 500 was 0.5 per cent higher, coming off its latest all-time high. The Dow Jones was up 431 points, or 1 per cent, in mid-afternoon trade, and the Nasdaq composite was 0.3 per cent higher. The Australian sharemarket is set to inch higher, with futures at 5.03am AEST pointing to a rise of 6 points, or 0.1 per cent, at the open. The ASX added 0.7 per cent on Wednesday.
Wall Street is higher on the back of Trump’s latest trade deal. Credit: Bloomberg
The Australian dollar was 0.7 per cent higher at 66.01 US cents at 5.18am.
Stocks jumped even more in Tokyo, where the Nikkei 225 rallied 3.5 per cent after President Donald Trump announced a trade framework that would place a 15 per cent tax on imports coming from Japan. That’s lower than the 25 per cent rate that Trump had earlier said would kick in on August 1.
“It’s a sign of the times that markets would cheer 15 per cent tariffs,” said Brian Jacobsen, chief economist at Annex Wealth Management. “A year ago, that level of tariffs would be shocking. Today, we breathe a sigh of relief.”
Loading
Trump has proposed stiff taxes on imports from around the world, which carry the double-edged risk of driving up inflation for US households while slowing the economy. But many of Trump’s tariffs are currently on pause, giving time to reach deals with other countries that could lower the tax rates. Trump also announced a trade agreement with the Philippines on Tuesday.
So far, the US economy has seemed to hold up OK despite the pressures on it. And tariffs already in place may be having less of an effect than expected, at least when it comes to the prices that US households are paying at the moment.
“The main lesson about tariffs so far is that passthrough to consumer prices is tracking somewhat lower than in 2019,” according to Goldman Sachs economist David Mericle.
Tariffs are certainly having an effect, to be sure, as big US companies across industries have been demonstrating through their profit updates in recent days.
Hasbro took a $US1 billion ($1.5 billion), non-cash hit to its results for the spring to write down the value of some of its assets following a review triggered by the implementation of tariffs. It said tariffs have had no impact yet on how much profit it’s making from each $US1 of its sales, but it expects to see costs ramp during the current quarter.
Hasbro’s stock fell 1 per cent even though it reported a stronger profit for the latest quarter than analysts expected, when not including the $US1 billion charge.
Like the toymaker, Texas Instruments’ stock also fell despite delivering results for the latest quarter that were above analysts’ expectations. It gave a forecasted range for profit in the current quarter whose midpoint fell a bit shy of Wall Street’s.
Analysts pointed to some cautious commentary from Texas Instruments executives about how the uncertainty created by tariffs could slow demand. Its stock sank 12.1 per cent.
Helping to offset that was a 12.5 per cent jump for GE Vernova’s stock. The energy company not only delivered a stronger profit than analysts expected, it also raised its forecasts for revenue from its power and electrification businesses.
GE Vernova also said that the inflation it’s expecting to see as a result of tariffs may be trending toward the lower end of $US300 million to $US400 million, net of mitigating actions.
Lamb Weston rallied 16.5 per cent after the supplier of French fries and other potato products delivered better results for the latest quarter than analysts expected and said it expects customers will continue to eat fries even with an uncertain economy. It also announced a plan to cut at least $US250 million in costs by cutting about 4 per cent of its workforce and making other moves.
Elsewhere on Wall Street, several stocks leaped as traders search for the next “meme stock” that could ride a wave of online enthusiasm to high prices, regardless of what the company’s profits are doing. Krispy Kreme, which came into the day with a 58.4 per cent loss for the year so far, was up as much as 38.7 per cent shortly after the market opened. It gave back most of those gains and was up 4.5 per cent in afternoon trading. GoPro jumped 14.6 per cent.
That’s even as some other potential meme stocks lost their momentum. Opendoor Technologies, which had more than tripled between the last two Mondays, fell 23.1 per cent.
Loading
In stock markets abroad, indexes rose across Asia and Europe following Trump’s announcements of trade deals.
Japan’s market was the big winner, where a series of automakers gave no public reaction as their stock prices rallied. Japanese companies tend to be cautious about their public reactions, and some business officials have privately remarked in off-record comments that they hesitate to say anything because Trump keeps changing his mind.
Elsewhere, Hong Kong’s Hang Seng rose 1.6 per cent, and France’s CAC 40 gained 1.4 per cent for two of the world’s bigger moves.
In the bond market, Treasury yields ticked higher.
The yield on the 10-year Treasury rose to 4.38 per cent from 4.35 per cent late Tuesday.
AP
The Market Recap newsletter is a wrap of the day’s trading. Get it each weekday afternoon.
Most Viewed in Business
Loading
