NEW YORK (AP) — U.S. stocks set more records on Wednesday following a trade deal between the world’s No. 1 and No. 4 economies, one that would lower proposed tariffs on Japanese imports coming to the United States. The S&P 500 added 0.8% to its all-time high. The Dow Jones Industrial Average rallied 507 points, or 1.1%, and the Nasdaq composite […]
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US stocks hit more records following US-Japan trade deal
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NEW YORK (AP) — U.S. stocks set more records on Wednesday following a trade deal between the world’s No. 1 and No. 4 economies, one that would lower proposed tariffs on Japanese imports coming to the United States.
The S&P 500 added 0.8% to its all-time high. The Dow Jones Industrial Average rallied 507 points, or 1.1%, and the Nasdaq composite climbed 0.6% to hit its own record.
Stocks jumped even more in Tokyo, where the Nikkei 225 rallied 3.5% after President Donald Trump announced a trade framework that would place a 15% tax on imports coming from Japan. That’s lower than the 25% rate that Trump had earlier said would kick in on Aug. 1.
Trump has proposed stiff taxes on imports from around the world, which carry the double-edged risk of driving up inflation for U.S. households while his critics claim they could slow down the economy. But many of Trump’s tariffs are currently on pause, giving time to reach deals with other countries that could lower the tax rates. Trump also announced a trade agreement with the Philippines on Tuesday.
So far, the U.S. economy has held up OK. And tariffs already in place may be having less of an effect than expectedt.
“The main lesson about tariffs so far is that passthrough to consumer prices is tracking somewhat lower than in 2019,” according to Goldman Sachs economist David Mericle.
Tariffs are certainly having an effect, to be sure, as big U.S. companies across industries have been showing through their profit updates in recent days.
All told, the S&P 500 rose 49.29 points to 6,358.91. The Dow Jones Industrial Average jumped 507.85 to 45,010.29, and the Nasdaq composite gained 127.33 to 21,020.02.
In stock markets abroad, indexes rose across Asia and Europe following Trump’s announcements of trade deals.
Japan’s market was the big winner, where a series of automakers gave no public reaction as their stock prices rallied. Japanese companies tend to be cautious about their public reactions, and some business officials have privately remarked in off-record comments that they hesitate to say anything because Trump keeps changing his mind.
Elsewhere, Hong Kong’s Hang Seng rose 1.6%, and France’s CAC 40 gained 1.4% for two of the world’s bigger moves.
In the bond market, Treasury yields ticked higher.
The yield on the 10-year Treasury rose to 4.38% from 4.35% late Tuesday.