US equities stabilise as Trump tariffs bite and oil prices retreat
Investors assess new Section 301 duties and AI spending concerns as major indexes track weekly losses despite Friday’s recovery.
US equities stabilised on Friday as market participants digested the implementation of new global tariffs alongside persistent volatility in artificial intelligence-related stocks. The Dow Jones Industrial Average rose 0.7 per cent, while the S&P 500 advanced 0.5 per cent. The tech-heavy Nasdaq Composite remained flat as Wall Street attempted to find a footing following a sharp sell-off in megacap technology names on Thursday.
Despite the daily gains, the major indexes were on track for weekly losses. The "Magnificent Seven" stocks collectively shed nearly $800 billion in market value on Thursday, driven by concerns over ballooning AI spending. The sell-off was broad-based, with semiconductor giant Intel falling on Friday despite its second-quarter results exceeding Wall Street’s expectations.
Overnight, the new Section 301 tariffs came into effect, levying rates of 10 to 12.5 per cent on the United States’ top trading partners. The White House stated the administration hopes the new framework will better withstand legal scrutiny. In a move to mitigate inflationary pressures, the White House exempted some energy products from the new duties as markets contend with higher oil prices that threaten to derail economic progress.
Commodity markets saw some relief, with Brent crude futures down 5 per cent to trade below $95 per barrel. However, the international benchmark was set for a weekly gain after recently touching $100 per barrel. The price easing came as markets reacted to reports suggesting the United States and Iran were nearing an interim peace deal to reopen the Strait of Hormuz.
On the domestic economic front, S&P Global’s flash PMI indicated that US business activity expanded at its fastest pace in eight months in July, a surge supported by the World Cup. In corporate earnings, Verizon Communications, American Express, and NextEra Energy reported earnings beats but missed revenue estimates.
