The international markets responded in either direction on Thursday in reaction to a new set of tariffs that have been implemented by U.S. President Donald Trump. U.S. stock indexes gained modestly, with the S&P 500 and Dow gaining slightly at 149 points and 210 points respectively. The Nasdaq however fell little. The cautious rise in the market gained traction amidst the continued concerns with Trump over his aggressive trade policies especially his declaration regarding a 50% tariff on U.S. copper imports to begin effect once the month of August rolls around. The maneuver increased tension in the already strained international trade scene.
The Brazilian real that was hit by the tariff news recovered on Thursday. Previously, the real had declined up to 2.3% and the stock index of Brazil fell by approximately 0.7%. President Lula da Silva announced that he would retaliate with force and summoned his most senior ministers to meet. The volatility in the currency markets has been high particularly since Trump came to power again as well as tariffs that have been introduced recently.
Despite the tariffs there have been fewer troubling effects on the market at large relative to April, when the same actions wrought bigger havoc. The analysts indicate this is because investors are optimistic that the trade talks might dilute the tensions before the implementation of the tariffs. Investors are also focusing their market on second-quarter results which are likely to be announced soon by large companies such as JPMorgan Chase. Although some analysts are skeptical because of the unpredictable nature of the environment in trade there may still be good performance of the tech companies.
At the same time the European stock index of STOXX 600 added 0.5%, and the MSCI global index increased a little bit more. Taiwanese TSMC reported good profits as demand for AI chips increased in recent times after Nvidia attained its new milestone by achieving a market cap of 4 trillion. This has maintained investor interest in the tech sector.
Elsewhere in the market the cryptocurrency Bitcoin remained close to its all-time highs, the dollar gained and Treasury yields edged higher following a strong gauge of jobless claims. Prices decreased and the U.S. crude ended lower by almost 2% as the global demand remained in question. All in all the markets are in a wait and to see mood.
