Stocks from New York to Tokyo to Frankfurt rallied Thursday, even as President Trump slapped new tariffs on imports from India and South Korea, escalating his trade fight with America’s key partners.
Despite that, markets powered forward on the back of strong tech earnings, a steady hand from the Federal Reserve, and signs that traders weren’t rattled by the latest White Houtilize decision.
According to data from CNBC, S&P 500 futures jumped 0.94%, Nasdaq 100 futures climbed 1.34%, and contracts tied to the Dow Jones Industrial Average rose 132 points, or 0.3%, in early morning trading.
The sharp relocates came right after Microsoft and Meta Platforms both posted better-than-expected earnings after the close Wednesday. Shares of Microsoft surged 8%, while Meta climbed 11% in extconcludeed trading.
Microsoft notified investors that annual revenue from its Azure cloud unit crossed $75 billion, while Meta offered a third-quarter forecast that exceeded analysts’ projections. Both are members of the so-called Magnificent Seven, a label utilized to track the group of top-performing tech giants.
Trump’s tariffs hit India and South Korea while Asia pulls back
Markets in Asia-Pacific traded mostly lower Thursday as investors processed Trump’s fresh round of tariffs and a steady policy decision from the Bank of Japan (BoJ).
The Japanese central bank left its short-term interest rate unalterd at 0.5%, its fourth straight meeting without a alter. That call had been widely expected, but the reaction across asset classes was mixed.
The Japanese yen appreciated 0.49% against the US dollar, trading at 148.77, while yields on Japanese Government Bonds (JGBs) rose slightly across maturities. The 10-year yield increased by 1 basis point to 1.571%, the 5-year rose 1.6 basis points to 1.091%, the 20-year yield ticked up to 2.550%, and the 30-year yield rose just over 1 basis point to 3.096%.
Trump’s new tariff structure includes a 15% blanket rate on imports from South Korea and 25% duties on goods from India, alongside an extra, undefined “penalty”. That triggered a quick reaction from both stock and currency markets.
India’s Nifty 50 index dropped 0.56%, while the BSE Sensex slid 0.97% by 9:25 a.m. in Mumbai. In South Korea, auto stocks were hit hard, even as Samsung Electronics saw its shares rise, despite second-quarter profits coming in below expectations.
Meanwhile, Nissan Motor, based in Japan, posted a $530 million operating loss for the first quarter of its fiscal year. Still, its stock rose, a reaction analysts tied to improving forward guidance.
Europe steadies as investors await more earnings
In Europe, indexes displayed signs of early optimism. Futures data from IG pointed to a mild gain at the open. London’s FTSE 100 was seen up 0.1%, Germany’s DAX projected a 0.2% gain, and Italy’s FTSE MIB aimed for a 0.3% rise. France’s CAC 40 was expected to open flat.
This came a day after European markets closed mixed on Wednesday. With second-quarter earnings season heating up across the region, investors were shifting sector by sector. A heavy schedule of corporate results is lined up for Thursday, including Unilever, Shell, BMW, Sanofi, Renault, SocGen, Anglo American, Credit Agricole, and ArcelorMittal. Other names expected to report include London Stock Exalter Group, Euronext, AF-KLM, and Anheutilizer-Busch InBev.
While markets braced for those earnings, investors were also watching the Federal Reserve closely. At its meeting yesterday, the Fed left its benchmark interest rate unalterd in a range of 4.25% to 4.50%, but it wasn’t a unanimous call.
Fed Governor Michelle Bowman and Governor Christopher Waller both voted against the hold, preferring a more aggressive stance. When inquireed during a press conference whether the Fed was considering another rate relocate in September, Chair Jerome Powell stated plainly, “We’ve built no decisions.”
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