U.S. Stocks Reach New Heights Following Trade Agreement
NEW YORK (AP) — American stocks achieved new records on Wednesday following a trade agreement between the top two global economies, aimed at reducing proposed tariffs on Japanese imports into the U.S.
The S&P 500 index rose by 0.8%, reaching its peak. Similarly, the Dow Jones Industrial Average surged by 507 points, equivalent to 1.1%, while the Nasdaq composite advanced 0.6% to achieve its own all-time high.
In Tokyo, stock prices soared even higher, with the Nikkei 225 index increasing by 3.5% after President Donald Trump revealed a trade framework imposing a 15% tax on imports from Japan, down from the previously stated 25% tariff set to begin on August 1.
“It’s remarkable that the markets are responding positively to 15% tariffs,” noted Brian Jacobsen, chief economist at Annex Wealth Management. “Just a year ago, such a tariff level would have been shocking. Now, it’s a relief.”
While Trump has proposed high tariffs on various imports, which could potentially increase inflation and slow economic growth, many current tariffs are on hold, allowing for negotiations with other nations. Trump also announced a trade agreement with the Philippines on Tuesday.
Despite ongoing economic pressures, the U.S. economy appears to be performing reasonably well. Tariffs enacted so far might be impacting consumer prices less than expected, according to Goldman Sachs economist David Mericle.
Companies like Hasbro have reported significant financial impacts due to tariffs, with a $1 billion write-down on assets. Although Hasbro’s stock dropped 0.9% despite reporting better-than-expected profits, other stocks like GE Vernova and Lamb Weston experienced notable rises due to strong earnings forecasts and cost-cutting measures.
Overall, the S&P 500 increased by 49.29 points to 6,358.91, while the Dow jumped 507.85 to 45,010.29, and the Nasdaq gained 127.33 to reach 21,020.02. Global markets also witnessed gains, with Japan leading the way as automakers’ shares rose following Trump’s announcements.
