The recent decision by former U.S. President Trump to increase tariffs has had immediate repercussions on the economy, with all three primary U.S. stock markets experiencing a decline of over 0.9% in response. The tariffs, which include a notable 35% charge on some Canadian products, spurred this significant shift in the markets. By the end of July, the S&P 500 managed to record a 2.2% increase, marking its third consecutive positive month. Similarly, the Nasdaq index featured a rise of 4.5%.
President Trump’s updated tariffs are set to come into effect just after midnight on August 7. The revisions will result in a considerable change in the average tariff rate, increasing it from the previous rate of 13.3%. This drastic rise is a far cry from the mere 2.3% tariff rate prior to Trump’s presidency in 2024.
AMP’s chief investment officer, Shane Oliver, cautioned investors to brace for potential economic impacts in the coming months, suggesting there’s a significant amount of information yet to be processed. This indicates the potential for some economic disruption, as the full extent of the tariff increments is digested by traders and financial analysts.
Apple also made headlines as their stock value rose by 2% following the release of their quarterly results, which exceeded market expectations primarily due to robust iPhone sales. Despite impressive figures, lingering fears concerning the ongoing impact of tariffs mildly tempered the resounding optimism around the company’s earnings.
Apple’s CEO, Tim Cook, is gearing up for acquisitions to bolster the company’s position in the Artificial Intelligence segment, expressing willingness to make purchases. With a track record of seven acquisitions already this year, Cook’s intent to keep pace with competing forces in the rapidly evolving AI landscape is apparent.
Amazon also had a roller-coaster ride as their stock plummeted by more than 6% during pre-market trading sessions. This occurred despite Amazon declaring a 33% leap in their earnings per share (EPS) when compared to the same period last year. However, the robust numbers were diluted by disappointing guidance and elevated capex forecasts.
Andy Jassy, Amazon’s CEO, reinforced the e-commerce giant’s place in the cloud computing industry. Despite prospective sales growth in the sector being projected to be lower than their competitors, Jassy remained confident in Amazon Web Services’ competitiveness, emphasizing their service’s advantages concerning security and availability.
On tariffs, Jassy downplayed the impact on Amazon, maintaining that they haven’t noticed a significant reduction in demand or substantial increase in prices. Nevertheless, he did not rule out the possibility of such changes occurring later in the year.
The U.S. Bureau of Labor Statistics is anticipated to reflect an addition of 110k non-farm payroll jobs in the July jobs report. Despite a predicted uptick in the unemployment rate from 4.1% to 4.2%, a projected increase in average hourly earnings from 2.7% to 3.8% might compensate for this slight hiccup.
Oil and gas corporation ExxonMobil is also on traders’ radars. The energy company is expected to disclose its quarterly earnings before the stock market opens. Key points of interest for investors will likely be any updates to their production volumes and strategy adapting to the global shift towards green energy.
Investors are also eyeing Berkshire Hathaway’s performance, as they are scheduled to release their results on Saturday morning. Market participants will be keenly observing the company’s report on cash holdings along with insights into insurance underwriting trends.
Finally, Figma, a design software company, experienced a dramatic surge in their market cap on their first trading day. The company’s shares drastically escalated by 250% inflating their market cap to almost $68 billion.
Figma’s initial public offering was oversubscribed by more than 40 times, demonstrating incredibly high investor demand. Bloomberg reported that more than half of the submitted orders were unable to secure any stock, a testament to the intense competition to grab a piece of this hot new offering.
Figma’s Co-founder, Dylan Field, hinted at bold plans for the future. The proposal includes merger and acquisition activities to rapidly scale operations, alongside ambitious growth plans leveraging funds from the company’s successful IPO.
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