US markets returned from their long weekend on the backfoot as President Donald Trump’s 25% tariffs for Japan and South Korea rattled Wall Street, although a later start means there’s more time for the Asian nations to cut deals with the world’s biggest economy.
Tesla was among the biggest drags on Wall Street as investors took a dim view of chief executive Elon Musk’s plans to start a new political party over his unease with the White House’s expansive fiscal policy.
Meanwhile, the Reserve Bank of Australia is expected to cut its target cash rate by a quarter point when it reviews policy today, ahead of New Zealand’s central bank review on Wednesday.
And the Sharesies brigade perked up a little through the whippy June quarter in the investment platform’s latest quarterly index, with a growing number of investors picking exchange traded funds over individual companies.
Back to work
Stocks on Wall Street were broadly weaker as investors returned from the long weekend, with the S&P 500 down 0.9% in late trading after US President Donald Trump began unveiling his latest tariffs for the nation’s trading partners.
Trump is sending letters setting out what nation's import levy will be if they don’t cut a deal with the US, which will come into effect in August, rather than the initial July 9 deadline when he extended the impost of the Liberation Day regime.
South Korea, Japan, Malaysia and Kazakhstan face 25% tariffs, while South Africa’s has been set at 30% and Laos and Myanmar at 40%. Reuters reported the European Union won’t receive a letter notifying it of its rate, with the framework for a deal said to be close to agreement.
“For the countries that face higher tariffs, there will still be time to negotiate, ahead of the new 1 August deadline for implementation,” Bank of New Zealand senior market strategist Jason Wong said in a note. “Negotiation would be the best next step for these countries, with the letter saying that any retaliation would be met with higher tariffs.”
Tesla was among Wall Street’s biggest decliners, falling 7.1% in late trading as investors responded to Elon Musk’s plans to set up the America Party in protest over the White House’s big beautiful tax and spending law, which will add trillions to the federal government deficit over the next decade.
Rocket Lab, which is seen as a beneficiary of any cooling by the US government on Musk’s SpaceX, climbed 6.9% in late trading.
The Sharesies brigade
Both Tesla and Rocket Lab were in the top five most-owned companies among Sharesies users in the platform’s latest quarterly index, which showed an improvement among investor confidence in the June quarter – albeit whipping around through the period which captured Trump’s Liberation Day tariffs.
“The quarter saw US tariffs and regional conflicts have a big impact on markets,” Sharesies co-chief executive Sonya Williams said in a statement. “Despite this, Sharesies investors took a balanced view of the market volatility, adopting an active approach to managing their investments and continuing to engage in saving and investing.”
Across the Atlantic, stocks in Europe were mixed with the UK’s FTSE 100 index down 0.2%, while Germany’s DAX 30 gained 1.2% and France’s CAC 40 advanced 0.4%.
Australian futures are pointing to a 0.3% decline when the S&P/ASX 200 index opens, while the kiwi dollar traded at 60.03 US cents at 7am in Auckland from 60.09 cents yesterday.
The RBA is expected to cut its cash rate 25 basis points to 3.6% at today’s policy meeting, with investors looking for how much more scope the central bank sees for further reductions.
New Zealand’s Reserve Bank is expected to keep the official cash rate at 3.25% at its Wednesday review. The kiwi dollar traded at 92.35 Australian cents from 92.40 cents yesterday.
No major local data is scheduled for today.
Reporting by Paul McBeth. Image from Wells Baum on Unsplash.
