2025-09-23 21:07
ORLANDO, Florida, Sept 23 (Reuters) - U.S. stocks slid on Tuesday in a wave of profit-taking from the previous day's highs, as investors digested cautious remarks from Federal Reserve Chair Jerome Powell , opens new tab and data that showed U.S. business activity slowing for a second straight month. In my column today I look at who is paying the record tariffs swelling U.S. Treasury coffers. So far, U.S. companies have taken the pain, but that burden is expected to shift to consumers. Will they be willing - or able - to "eat the tariffs"? Sign up here. If you have more time to read, here are a few articles I recommend to help you make sense of what happened in markets today. Today's Key Market Moves Today's Talking Points: * U.S. government shutdown It's that time of year again, when budget gridlock in Washington threatens to trigger a U.S. government shutdown and, in the worst case scenario for markets, some form of technical default. We are eight days away from what would be the 15th partial shutdown since 1981. Uncertainty and volatility could ripple through markets until agreement on government funding is reached, which history shows is often at the 11th hour. Investors won't be getting complacent though, and on Tuesday President Donald Trump raised the stakes, scrapping a meeting with Democratic leaders. Eight days and counting. * (Dis)United Nations? The United Nations 80th General Assembly roared into life on Tuesday, with Trump center stage. In a 56-minute combative speech, Trump rejected the idea of a Palestinian state, urged Europe to pressure Russia to force an end to the war in Ukraine, and told leaders of nations he deems soft on immigration: "Your countries are going to hell." Meanwhile, in a nod to U.S. foreign policy, Brazil's President Luiz Inacio Lula da Silva said recent "unilateral attacks" against Brazil's institutions and economy were unacceptable. Despite that, Trump said he will meet Lula next week , opens new tab, adding that they had "excellent chemistry" during a brief encounter at the U.N. * Golden years Gold rose as much as 1% on Tuesday, hitting a new peak and bringing $4,000/oz closer into view. It is up a whopping 45% this year, and recently scaled its previous inflation-adjusted high from 1980 of around $3,500/oz. Inflation worries are a factor, but there must be more to it - if it was just inflation, long-dated yields would be spiking and yield curves would be steepening sharply too. Geopolitical concerns, central bank demand, divestment out of fiat currencies and into hard assets must also be driving this. Do U.S. consumers have the appetite to eat the tariffs? In May, U.S. President Donald Trump lashed out at Walmart, telling the retail giant to "eat the tariffs" instead of raising prices for consumers. Corporate America heard the message. The consensus among economists is that Trump's tariff burden has so far been shouldered by U.S. companies and that consumers have got off relatively lightly, although these scales are widely expected to tip the other way in the coming months. How far remains to be seen. But given that consumer spending accounts for around 70% of annual U.S. economic activity, changes to the final price of imports could be a vital part in determining how growth and inflation rates pan out. The dust is settling on a pretty chaotic six months since Trump's April 2 "Liberation Day" tariff announcement, even though the final duties on goods from China and India, and key imports such as chips and semiconductors, have yet to be agreed. But the parameters are emerging. The average effective tariff rate will probably be somewhere between 15% and 20%, up significantly from 2.5% in December and the highest since the 1930s. The Budget Lab at Yale's latest estimate is 17.4%. Up to now, the effective rate has been closer to 10% to 12%, most of which has been swallowed by U.S. firms, who have been reluctant to pass the higher costs to customers. Distortions around the front-loading of imports, and chaos around tariff rates and implementation were so high it made sense to sit tight. CONSUMER SQUEEZE COMING Tariffs vary hugely from sector to sector, and industry to industry. Michael Pearce, deputy chief U.S. economist at Oxford Economics, notes that consumers are bearing almost all the tariffs burden in sports and furniture goods, while domestic and foreign firms are doing the heavy lifting in autos and clothing. But on aggregate, consumers have yet to really feel the squeeze. BNP Paribas economists calculate that U.S. firms have shouldered 64% of tariff pain so far, foreign exporters just under 20%, and U.S. consumers only 17%. Their economic models suggest that will flip dramatically in the coming months to 63% for the U.S. consumer and just 1% for U.S. firms, while a recent Atlanta Fed blog , opens new tab concluded that, on average, U.S. firms reckon they could pass through more than half of a 10% cost increase without damaging demand. Will the consumer pay up? Economic growth in the first half of the year was around half of what it was last year, job growth is evaporating, and the Fed has started cutting interest rates again. Companies will be wary of passing on hefty price hikes to their customers, especially with inflation still uncomfortably sticky. And there's also this to consider, although few will admit it - many companies won't pass on significant price hikes for fear of antagonizing the Trump administration. "The burden of tariffs on the economy is creeping up. And the biggest impact (on consumers) is still to come," says Michael Pearce, deputy chief U.S. economist at Oxford Economics. "But in the near term, the risk is that less than two thirds gets passed onto the consumer." GOVERNMENT REVENUE FROM TARIFFS Trump administration officials, especially those at the Treasury, may not mind much who ultimately pays - federal government revenues from tariffs are soaring. The Budget Lab at Yale estimates put revenue raised from new tariffs year-to-date through August at $88 billion, with around $23 billion of that in August alone. Torsten Slok, chief economist at Apollo, calculates that the government is currently collecting around $350 billion in tariffs at an annualized rate, equivalent to 18% of annual household income tax payments. Looking out over the next decade, tariffs are projected to bring in a net $2 trillion to government coffers, according to the Budget Lab at Yale, and cut the deficit by around $2.6 trillion, according to Oxford Economics. America's wider fiscal outlook is not great, meaning the longer this revenue stream keeps running, the less inclined future lawmakers will be to turn it off at source. That's a few years out. More immediately, we may be about to find out if consumers are willing to do what businesses have done for the most part up to now and "eat the tariffs". What could move markets tomorrow? Want to receive Trading Day in your inbox every weekday morning? Sign up for my newsletter here. Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles , opens new tab, is committed to integrity, independence, and freedom from bias. https://www.reuters.com/business/global-markets-trading-day-graphic-2025-09-23/
2025-09-23 21:06
TSX ends down 0.5% at 29,815.63 Posts intraday record high above 30,000 Technology falls 2.9% with Shopify down 4.5% Industrials end 1.5% lower Sept 23 (Reuters) - Canada's main stock index pulled back on Tuesday from a record intraday high, ultimately ending lower as industrial and technology shares lost ground. The S&P/TSX composite index (.GSPTSE) , opens new tab ended down 143.35 points, or 0.5%, at 29,815.63. During the session the index traded above the 30,000 threshold for the first time after posting a record closing high on Monday. It has advanced 20.6% since the start of the year. Sign up here. "In spite of our difficult trading arrangement with the United States, the whole world needs what we have and that's energy, copper, gold and who doesn't want to buy an oligopoly of bank stocks," said Matt Skipp, President of SW8 Asset Management. Five banks dominate the domestic lending market. Financials account for roughly one-third of the TSX's market capitalization, while resource shares make up an additional 32%. Bank of Canada Governor Tiff Macklem said the new global uncertainty, triggered in part by U.S. tariffs, underscored the need for Canada to boost productivity and find new foreign markets. Last week, the central bank eased interest rates for the first time since March to support the economy, lowering its benchmark rate by 25 basis points to 2.50%. Wall Street also ended lower on Tuesday. The Toronto market's industrials sector (.GSPTTIN) , opens new tab fell 1.5% and technology (.SPTTTK) , opens new tab lost 2.9%. Shares of e-commerce company Shopify Inc (SHOP.TO) , opens new tab were down 4.5%. Energy (.SPTTEN) , opens new tab was a bright spot, rising 1.1%. The price of oil settled 1.8% higher at $63.41 a barrel after a deal to resume exports from Iraq's Kurdistan stalled. https://www.reuters.com/markets/europe/tsx-futures-tick-up-gold-hits-fresh-record-high-2025-09-23/
2025-09-23 21:02
Boeing rises on Uzbekistan deal, potential China order Powell strikes middle path on inflation, jobs Indexes: Dow down 0.2%, S&P 500 down 0.6%, Nasdaq down 0.9% NEW YORK Sept 23 (Reuters) - U.S. stocks finished lower on Tuesday, breaking a three-session string of record closing highs, as Federal Reserve Chair Jerome Powell said the U.S. central bank needs to balance inflation concerns with a weakening job market in its coming interest rate decisions. The Nasdaq led declines, with shares of Nvidia (NVDA.O) , opens new tab falling 2.8% after rising in the previous session, when the chipmaker said it plans to invest up to $100 billion in OpenAI. Sign up here. Amazon.com (AMZN.O) , opens new tab, Microsoft (MSFT.O) , opens new tab and Apple (AAPL.O) , opens new tab also were lower. In comments Tuesday, Powell offered little hint of when he thinks the Fed might next cut interest rates. The Fed last week cut rates for the first time this year and indicated further cuts may be coming. "The big event of the day was Powell's speech. He was somewhat on the dovish side, but also he showed cautiousness, and that indicates that while he left the door open for another rate cut, there was really no hint of when and how much the next rate cut could be," said Peter Cardillo, chief market economist at Spartan Capital Securities in New York. "The market began to sell off on that," he said, adding: "It was also ripe for some sort of a pullback." Powell also said equity prices are fairly highly valued. The three major U.S. indexes registered record closing highs for the previous three sessions. The Dow Jones Industrial Average (.DJI) , opens new tab fell 88.76 points, or 0.19%, to 46,292.78, the S&P 500 (.SPX) , opens new tab lost 36.83 points, or 0.55%, to 6,656.92 and the Nasdaq Composite (.IXIC) , opens new tab lost 215.50 points, or 0.95%, to 22,573.47. Powell's colleagues earlier gave comments on both sides of the policy argument. Fed Vice Chair for Supervision Michelle Bowman said the Fed could downplay concerns about persistent inflation and needed to make a commitment to cut rates in support of the job market. Helping to limit declines on the Dow, Boeing shares rose 2% after it secured an order from Uzbekistan Airways worth over $8 billion. After the closing bell, shares of Micron Technology (MU.O) , opens new tab were up 0.7% as the company reported results and gave an upbeat forecast. The stock ended the regular session up 1.1%. Declining issues outnumbered advancers by a 1.12-to-1 ratio on the NYSE. There were 561 new highs and 86 new lows on the NYSE. On the Nasdaq, 1,786 stocks rose and 2,871 fell as declining issues outnumbered advancers by a 1.61-to-1 ratio. Volume on U.S. exchanges was 18.89 billion shares, compared with the 17.66 billion average for the full session over the last 20 trading days. https://www.reuters.com/business/wall-street-futures-hold-steady-after-tech-fueled-rally-powell-focus-2025-09-23/
2025-09-23 20:46
This is a breaking news story. Full coverage will be available soon. Us judge inclined to receive additional briefings about recommended bid for citgo parent through oct 15, final oral arguments set for oct 20-21, court filing Sign up here. https://www.reuters.com/world/us/us-judge-inclined-receive-additional-briefings-about-recommended-bid-citgo-2025-09-23/
2025-09-23 20:46
WASHINGTON, Sept 23 (Reuters) - The U.S. Department of Agriculture has placed on leave a team of federal economists and researchers responsible for the government's main survey on food insecurity, the union representing some of the workers said on Tuesday. About a dozen employees, all involved with economic research at the USDA, were put on leave, said Laura Dodson, a chapter vice president of the American Federation of Government Employees union. Sign up here. President Donald Trump's administration said over the weekend it has canceled the USDA's annual food insecurity survey, ending a decades-long effort to track how many Americans struggle to access enough food. Anti-hunger advocates say the USDA's decision to end its annual food insecurity survey will make it harder to measure the impact of the Trump administration's cuts to nutrition programs such as food stamps. About 13.5% of U.S. households were food-insecure at some point in 2023, the most recent USDA report says. When asked about the food researchers put on leave, the USDA said, without elaborating, that some employees made "unauthorized disclosure of non-public information." The union said the department offered no clarification on its claims. https://www.reuters.com/world/us/us-department-agriculture-puts-some-food-researchers-leave-2025-09-23/
2025-09-23 20:42
ICAO triennial assembly runs from September 23 to October 3 Assembly navigating geopolitical tensions with Russia, North Korea Russia seeking ICAO council chair after losing seat in 2022 Sept 23 (Reuters) - A global gathering of aviation leaders that kicked off on Tuesday in Montreal faced U.S. criticism over its green focus, even as delegates confront high tech threats, pollution from rising numbers of flights and labor shortages. Technology is easing global aviation but remains vulnerable , opens new tab to attacks, with some of Europe's biggest airports still facing disruptions on Monday after hackers knocked out automated check-in systems. Sign up here. The United Nations' International Civil Aviation Organization warned that a global system now serving about 4.6 billion passengers a year needs work if it is to accommodate nearly triple that number by 2050. "A system currently built to serve 4.6 billion passengers will not accommodate three times that number, unless we ensure its transformation," ICAO council President Salvatore Sciacchitano said. Several delegates at ICAO's triennial assembly, which runs through October 3, defended its environmental goals, after U.S. Transportation Secretary Sean Duffy urged the agency to focus on aviation safety and security instead. The agency, created in 1944 to manage the skies with a consensus-driven approach, is facing geopolitical tensions. Its 36-state governing council has weighed in on Russia's 2022 invasion of Ukraine and actions by North Korea, reproaching them for disturbances to critical satellite navigation systems that violated international rules on aviation. "You know even during the Cold War era, after the USSR joined ICAO, there was cooperation in this very particular technical field that was not taking place outside," said Vincent Correia, co-director of McGill University's Institute of Air and Space Law in Montreal. "I tend to be optimistic, but ... I know as well that the tensions are very, very high at the moment." In a working paper, North Korea accused ICAO's council of a double standard for not taking action against South Korea for alleged military drone infiltration of its skies. Moscow said the Russian delegation will work on promoting the country's bid for membership on council after losing its seat during the last assembly in 2022. Reuters reported on Monday that Russia is also calling for an easing of aviation-related boycotts. Countries and carriers will also be under pressure to make advances on reducing pollution from flight, with airline trade group IATA acknowledging that the industry will not hit a target of reducing emissions by 5% in 2030. "It is clear that there are some airlines who struggle to see how we can afford the transition to net zero," IATA Director General Willie Walsh told reporters last week. Walsh said , opens new tab carriers were still committed to reducing pollution. Aviation is facing a staffing shortage as travel has spiked since the end of the pandemic, with India asking for a hiring code of conduct to avoid its pilots being poached. Global passenger traffic is projected to grow to 7.2 billion by 2035, compared with 4.6 billion travelers in 2024. An additional 670,000 pilots alone will be needed by 2043, ICAO estimates. Brazil, whose travel sector is expected to grow 10% a year, is trying to attract and retain more women and minorities as it is already short on mechanics and fears a bigger shortfall looming. "Fifty-one percent of our population are women and only 3% of our pilots are women," said Tiago Faierstein, the recently appointed president of Brazilian civil aviation regulator ANAC. https://www.reuters.com/sustainability/climate-energy/un-aviation-gathering-opens-under-shadow-cyberattacks-geopolitical-tensions-2025-09-23/
