BANGKOKU. Following the United States’ agreement to impose a smaller tax on autos and other vehicles than President Donald Trump had previously threatened, U.S. market indices are lurching Monday. But there are still a lot of issues to sort out, and Wall Street is about to face a week full of possible flashpoints that could cause market tremors.
After that, the S&P 500 was essentially unchanged in noon trade. As of 11:30 a.m. Eastern time, the Nasdaq composite was up 0.2% from its own record, while the Dow Jones Industrial Average was down 8 points, or less than 0.1%.
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Elon Musk, the CEO of Tesla, announced that the business had inked a potentially $16.5 billion agreement with Samsung Electronics to provide processors for the electric vehicle manufacturer, which caused the stock to rise 3.5%. In South Korea, Samsung’s shares increased 6.8%.
Following Alphabet’s announcement last week that it was expanding its expenditure on AI chips and other investments by $10 billion to $85 billion this year, other chip and AI startups were also doing well. Advanced Micro Devices, a chip manufacturer, increased 3.7%, while Super Micro Computer, a server manufacturer, increased 6.7%.
They assisted in making up for Revvity’s 9.7% decline. The life sciences and diagnostics company announced a higher-than-expected earnings for the most recent quarter, but it also provided a projected range for profit for the entire year, with the midpoint falling short of analysts’ projections.
Following significant increases in their stock prices over the past few months, companies are often under pressure to generate strong profit growth. Hopes that Trump will reverse some of his harsh proposed tariffs were mostly responsible for the increase, while detractors claim that the entire U.S. stock market appears pricey until businesses generate more earnings to support the actions.
There might be a lot more fireworks this week. Chris Larkin, managing director, trading and investment at E-Trade from Morgan Stanley, said this is as hectic as the markets can get in a week.
Nearly a third of all companies in the S&P 500 index are expected to provide updates on their spring earnings, with hundreds of U.S. companies in line to do so. Among them are industry titans Microsoft, Amazon, Apple, and Meta Platforms. These businesses have become so large that changes in their shares can virtually determine the actions of the S&P 500 index as a whole. The value of Microsoft alone is over $3.8 trillion.
The Federal Reserve will make its most recent interest rate decision public on Wednesday.
Trump has been adamantly and loudly urging the Fed to lower interest rates, which might help the economy. But before the Fed takes any further action, Fed Chair Jerome Powell has been adamant that he wants to wait for additional information regarding the impact of Trump’s tariffs on inflation and the economy. The economy just recently emerged from a scarring run in which inflation momentarily exceeded 9%, and lower interest rates can push inflation further.
Although a few Trump appointees may vote against the decision, Wall Street generally expects Fed members to hold off on reducing interest rates until September. Since lowering interest rates multiple times at the end of 2024, the Fed has put them on hold this year.
There will also be a number of potentially market-moving economic updates this week. Reports on the level of confidence among American consumers and the number of job openings advertised by American firms will be released on Tuesday. The first estimate of the U.S. economy’s growth rate in the spring will be released on Wednesday, and many anticipate a drop from the first three months of the year.
The most recent inflation indicator that the Fed favors will be released on Thursday. While a hotter-than-expected number would make the Fed more cautious, a mild reading might allow it more flexibility to lower interest rates in the near future.
Additionally, an update on how many more employees U.S. firms hired in June than they sacked will be released on Friday.
Prior to all of that activity, Treasury rates remained largely unchanged in the bond market. Late Friday, the 10-year Treasury yield increased somewhat from 4.40% to 4.41%. The yield on the two-year Treasury, which more accurately reflects Fed action expectations, increased from 3.91% to 3.93%.
Indexes in European stock markets fell after the framework for the trade pact was announced.
As representatives from the second-largest economy in the world got ready to meet with a U.S. delegation in Sweden, Chinese stocks increased. Hong Kong and Shanghai stocks increased by 0.7% and 0.1%, respectively.
The rest of Asia saw uneven indexes, with Japan’s Nikkei 225 suffering one of the largest losses globally, down 1.1%.
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Elaine Kurtenbach, an AP Business Writer, made a contribution.
