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Financial-Markets 07/09 09:41
U.S. stocks rose in early trading Wednesday as Wall Street weighed the
latest developments in the Trump administration's bid to win more deals with
global trading partners.
The S&P 500 was up 0.7%, a solid start after posting a slight loss a day
earlier. The benchmark index remains near the record it set last week after a
better-than-expected U.S. jobs report.
The Dow Jones Industrial Average was up 224 points, or 0.5%, as of 10:01
a.m. Eastern time, and the Nasdaq composite was 1.1% higher.
Bond yields were mostly lower. The yield on the 10-year Treasury was at
4.38%, down from 4.40% late Tuesday.
Gains in technology stocks helped drive the market higher, outweighing
declines in energy and other sectors.
Nvidia rose 2.5% and Microsoft added 1.6%.
Wall Street has been focused this week on President Donald Trump's renewed
push to use threats of higher tariffs on goods imported into the U.S. in hopes
of securing new trade agreements with countries around the globe.
Wednesday was initially set as a deadline by Trump for countries to make
deals with the U.S. or face heavy increases in tariffs. But with just two trade
deals announced since April -- one with the United Kingdom and one with Vietnam
-- the window for negotiations has been extended to Aug. 1.
The extension has calmed Wall Street for the time being, unlike the tariff
rollouts of the spring, which sent markets swinging wildly from day-to-day for
weeks.
Still, this latest phase in the White House's trade war heightens the threat
of potentially more severe tariffs that's been hanging over the global economy.
Higher taxes on imported goods could hinder economic growth, if not increase
recession risks.
On Tuesday, Trump said he would be announcing tariffs on pharmaceutical
drugs at a "very, very high rate, like 200%." He also said he would sign an
executive order placing a 50% tariff on copper imports, matching the rates
charged on steel and aluminum.
Copper prices eased Wednesday after spiking a day earlier. Shares in mining
company Freeport-McMoRan were down 0.7%.
Outside of trade talks, some corporate news surfaced after a typically quiet
early summer stretch.
Pharmaceutical giant Merck is buying Verona Pharma, a U.K. company that
focuses on respiratory diseases, in an approximately $10 billion deal. If
approved by Verona shareholders and U.K. officials, Merck will get access to
Verona's chronic obstructive pulmonary disease medication Ohtuvayre. Verona
shares jumped more than 20% on the news, while Merck shares were up 2.1%.
Delta Air Lines kicks off earnings season on Thursday, with most analysts
expecting the airline's second-quarter profit to decline from a year ago. Delta
and other major U.S. carriers have trimmed their flight schedules and pulled
their forecasts this year as consumers pull back on travel and other
nonessential spending due to uncertainty about how Trump's tariffs will affect
their budgets.
Later Wednesday, the Federal Reserve will release the minutes from its June
policy meeting, when it left its benchmark rate alone for the fourth straight
time, also due to uncertainty over how tariffs will impact the labor market and
broader economy.
In overseas markets, stock indexes were broadly higher in Europe after a
mixed finish in Asia.
U.S. benchmark crude was down 0.7%, while Brent crude, the international
standard, was off 0.6%.
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