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Business Standard
9 hours ago
- Business
- Business Standard
Wall Street Ends Flat as Fed Holds Rates; Global Markets Mixed, Banking Stocks Rally
US indices saw minimal movement after the Fed held rates steady; jobless claims dipped slightly, housing starts fell and global stocks were mixed. The Nasdaq inched up 25.18 points or 0.1% to 19,546.27, the S&P 500 edged down 1.85 points or less than a tenth of a% to 5,980.87 and the Dow slipped 44.14 points or 0.1% to 42,171.66. Wall Street ended lackluster after the Fed held interest rates steady at 4.254.50%, aiming to support employment and 2% inflation. Despite economic fluctuations, the Fed still projects two rate cuts by end-2025, lowering rates to 3.754.0%. Early market gains came amid concerns over escalating tensions between Israel and Iran. Meanwhile, Trump claimed Iran seeks negotiations, even suggesting talks at the White House. Labor department released a report showing first-time claims for U.S. unemployment benefits edged modestly lower in the week ended June 14th. The report said initial jobless claims dipped to 245,000, a decrease of 5,000 from the previous week's revised level of 250,000. Meanwhile, it also said the less volatile four-week moving average crept up to 245,500, an increase of 4,750 from the previous week's revised average of 240,750. With the uptick, the four-week moving average reached its highest level since hitting 246,000 in the week ended August 19, 2023. The Commerce Department too published a report showing a steep drop by new residential construction in the U.S. in the month of May. Banking stocks turned in some of the market's best performances on the day, with the KBW Bank Index climbing by 1.9%. Telecom and brokerage stocks moved upwards while energy stocks moved to the downside along with the price of crude oil. Asia-Pacific stocks turned in a mixed performance. Japan's Nikkei 225 Index advanced by 0.9%, while Hong Kong's Hang Seng Index slumped by 1.1%. The major European markets also ended the day mixed while the U.K.'s FTSE 100 Index inched up by 0.1%, the French CAC 40 Index fell by 0.4% and the German DAX Index decreased by 0.5%. In the bond market, treasuries closed little changed following the rebound seen in the previous session. Subsequently, the yield on the benchmark ten-tear note which moves opposite of its price, crept up by less than a basis point to 4.39%.
Time of India
2 days ago
- Business
- Time of India
Trump to launch new round of tariffs, targeting pharma, chips and minerals
The Trump administration plans new tariffs. These tariffs target sectors vital to national security. Semiconductors and pharmaceuticals are included. These tariffs are under Section 232 of the Trade Expansion Act. Tariffs on steel and aluminum already exist. These tariffs may impact almost every good entering the US. Pharmaceutical tariffs are coming soon. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads The Trump administration is pressing ahead with another tariff barrage that some trade experts say is more legally sound than the president's country-by-country duties and may end up having an equally broad effect on US Commerce Department is set within weeks to announce the outcomes of its investigations into sectors deemed vital to national security, including semiconductors, pharmaceuticals and critical minerals . The probes are widely expected to result in levies on a range of foreign-made products in those Donald Trump is already using that authority, under Section 232 of the Trade Expansion Act, to impose import taxes on steel and aluminium he launched in 2018. Recently, he's widened the scope by targeting consumer goods that contain the one estimate from Michigan State University, Trump's steel and aluminium tariffs , currently set at 50%, are hitting almost $200 billion worth of steel, aluminium and household items such as fishing reels and brooms - nearly quadruple the amount during his first effort comes as Trump's April tariffs on major trading partners stand on shakier legal ground, with the Supreme Court asked on Tuesday to consider striking them down. Some administration officials believe the 232 levies could effectively supplant the country-by-country duties that have drawn legal scrutiny and bogged down negotiations with US allies and adversaries alike trying to strike Nikakhtar, a partner at Wiley Rein and former senior Commerce official during Trump's first term, said the 232 measures are shaping up to amount to "something close to global tariffs.""These 232 actions are very likely going to result in import restrictions on almost every good entering the US, and the size and scale of these restrictions will be so massive because China's distortion has been so massive," she to reporters this week while returning from the Group of Seven summit in Canada, Trump said pharmaceutical tariffs will be coming "very soon" and they will encourage companies to reshore production. "It's going to bring most of them back into, at least partially back in," he Commerce Department did not respond to a request for latest example of Trump's wider targeting under his 232 powers came last week when the Commerce Department announced that 50% duties on steel and aluminum products would be expanded to cover home appliances including dishwashers, dryers and washing machines. All of those items are deemed vital to national security under the law Trump invoked to impose duties.
Axios
2 days ago
- Business
- Axios
The housing market slump is getting worse
A longtime slump in the new housing sector is getting worse, according to new indicators. Why it matters: The broader economy held up during a "rolling recession" that hit the housing industry in recent years. That might not be the case this time if other sectors slow concurrently. Catch up quick: Builders broke ground on home construction in May at the slowest pace in five years. The issuance of building permits, an indicator of the appetite to build homes, also hit a five-year low. Sentiment among homebuilders dropped to the lowest level since 2022 in June. Lennar, one of the nation's biggest homebuilders, reported weaker-than-expected quarterly earnings, citing a soft housing market. State of play: Now the sector faces new Trump-era factors, including tariffs and deportations, that are holding back construction and limiting supply. Plus, in certain parts of the country, there is too much inventory compared to demand. Driving the news: Housing starts fell almost 10% last month to an annualized pace of 1.3 million, well below the rate that economists expected, the Commerce Department said Wednesday morning. Building permits also came in worse than expected, particularly for single-family homes. They dropped to an annualized rate of 898,000, nearly 3% below April. What they're saying: The National Association of Home Builders said sentiment among builders has only been lower than its June level twice since 2012. "Buyers are increasingly moving to the sidelines due to elevated mortgage rates and tariff and economic uncertainty," said Buddy Hughes, a North Carolina-based developer who chairs the NAHB, said in a statement Tuesday. The big picture: Softer demand is being met by higher building costs, including for labor and materials. The industry is heavily reliant on immigrant workers, who are being targeted for deportations by the Trump administration. Meanwhile, tariffs on steel and aluminum have doubled to 50%, except for U.K. imports of the materials. The Trump administration is considering higher tariffs on wood materials, including lumber. "New construction has slowed as builders have pulled back on production," Lennar co-CEO Stuart Miller said on an earnings call Tuesday.
The Hill
2 days ago
- Business
- The Hill
Housing starts drop to lowest level since pandemic
The number of housing units that started construction in May fell to the lowest level since 2020, as the sector battles headwinds blown by high interest rates. Housing construction dropped 9.8 percent from April to May, the Commerce Department reported Wednesday. If construction continued at that pace through the year, there would be 1.25 million units built in 2025, down from a pace of 1.39 million reached in April. The number is down 4.6 percent from a year ago, when the pace was 1.4 million units. 'Housing starts plunged in May as builders step back in 2025 amidst fading demand and rising costs,' Nationwide economist Ben Ayers wrote in a commentary. New building permits were down 2 percent from April. Housing completions were up 5.4 percent on the month but were still down 2.2 percent on the year. The housing sector was jolted by interest rate hikes delivered by the Federal Reserve in response to soaring post-pandemic inflation. While interest rate hikes combat inflation by slowing the pace of borrowing, they can also bolster the price of housing directly by making financing more expensive. Most housing is paid for with debt. Inflation as measured by the consumer price index (CPI) has fallen to an annual increase of 2.4 percent, but shelter inflation is still at 3.9 percent. Housing inflation has lagged headline inflation throughout the post-pandemic period. Rates on the 30-year fixed rate mortgage were at 6.84 percent this week, still way above pre-pandemic rates around 3.5 percent. Meanwhile, housing inventories are at their highest level since November 2019. The U.S. has a huge shortage of affordable housing. The National Association of Home Builders put the shortage at 1.5 million units in 2021 while government mortgage backer Freddie Mac put it at 3.8 million units and the National Association of Realtors estimated it at 5.5 million units. Analysts noted Wednesday that the May drop in starts was concentrated in multifamily construction, which does not bode well for the affordable housing shortage. 'A sharp downward shift in multifamily construction drove the decline in May,' Ben Ayers wrote.
Time of India
2 days ago
- Business
- Time of India
Americans turn cautious and retail sales slide after a spring spending surge to beat tariffs
Retail sales fell sharply in May as consumers pulled back from a spending surge early this year to get ahead of President Donald Trump's sweeping tariffs on nearly all imports. Sales at retail stores and restaurants dropped 0.9% in May, the Commerce Department said Tuesday, after a decline of 0.1% in April. The figure was pulled down by a steep drop in auto sales, after Americans ramped up their car-buying in March to get ahead of Trump's 25% duty on imported cars and car parts. Excluding autos, sales fell 0.3%. The sales drop is hitting after sharp declines in consumer confidence this year. Still, inflation has cooled steadily and unemployment remains low, which could fuel steady spending in the coming months, as the economy has remained mostly solid. A category of sales that excludes volatile sectors such as gas, cars, and restaurants rose last month by 0.4%, a sign that consumers are still spending on some discretionary items. Overall, the report suggests consumers have pulled back a bit but not dramatically so. The retail sales report covers about one-third of consumer spending, with the other two-thirds consisting of spending on services. Economists expect overall consumer spending to grow in the April-June quarter. "Today's data suggests consumers are downshifting, but they haven't yet slammed the brakes," Ellen Zentner, chief economic strategist for Morgan Stanley wealth management, said in an email. "Like the economy as a whole, consumer spending has been resilient in the face of tariff uncertainty." Yet many categories saw sharp declines. Car sales plunged 3.5%, while sales at home and garden centers dropped 2.7%. They fell 0.6% at electronics and appliance stores and 0.7% at grocery stores. There were some bright spots: Sales rose 0.9% at online retailers, 0.8% at clothing stores, and 1.2% at furniture stores. Sales at restaurants and bars, a closely watched indicator of discretionary spending, fell 0.9% in May, though that followed a solid gain of 0.8% in April. It is a difficult time for retailers, many of whom built up large inventories this spring after Trump warned that he would impose widespread import taxes. Traffic at the port in Los Angeles has fallen sharply in recent weeks, suggesting fewer goods are entering the United States. Some consumer products companies say they are seeing the impact of tariffs on their own costs and sales. Paul Cosaro, CEO of Picnic Time, Inc, which makes picnic accessories like baskets, coolers, and folding chairs, said that orders from retailers are down as much as 40% this summer compared with a year ago. His company sells to a variety of stores like Target and Williams-Sonoma. Cosaro noted that some stores have been cautious because they're not sure how shoppers will react to higher prices. Some cancelled orders because Cosaro couldn't tell them how much the new prices would be due to all the uncertainty. Roughly 80% of the company's goods are made in China, with the rest in India and Vietnam. The company, founded roughly 40 years ago and based in Moorpark, California, was forced to raise prices on average from 11% to 14% for this summer selling season, Cosaro said. A folding outdoor chair now costs $137 this month, up from $120 in late 2024, he added. The company's sales are still down this year, even though some shoppers accelerated their purchases out of concern that prices would rise. "Shoppers are very price sensitive," Cosaro said. The company has implemented a hiring freeze because of all the extra tariff costs, he added. So far this year the company, which employs from 70 to 100 people, has had to pay $1 million in tariffs. A year ago at this time, the bill was a third of that amount. The retail sales report comes as other evidence indicates shoppers have been pulling back more amid worries about higher prices from Trump's tariffs. Naveen Jaggi, president of retail advisory services in the Americas for real-estate firm JLL, said that he's hearing from malls that sales are slowing down heading into the official summer months. Retailers are pushing up back-to-school promotions to this month from July, he said. They want to get shoppers in early for fear consumers may not want to spend in the later months when prices will likely go up, he said. So far, Trump's tariffs haven't yet boosted inflation. Consumer prices rose just 2.4% in May compared with a year ago, the government said last week. Many stores and brands, including Walmart, Lululemon, and J.M. Smucker Co., have said they plan to or have raised prices in response to tariffs. Deckers Outdoor, which is behind such shoe labels as Hoka and Uggs, said late last month that it plans price increases, which will likely hurt sales. "We expect to absorb a portion of the tariff impact," Chief Financial Officer Steven Fasching told analysts. "We also believe there is potential to see demand erosion associated with the combination of price increases and general softness in the consumer spending environment." D'Innocenzio reported from New York.
