Stocks mixed after Trump issues tariffs on EU, Mexico
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(NEW YORK) — Stocks were mixed in early trading on Monday after President Donald Trump over the weekend issued 30% tariffs on the European Union and Mexico, rekindling tensions with two of the largest U.S. trade partners and threatening to raise consumer prices.
The Dow Jones Industrial Average dropped 115 points, or 0.26%, while the S&P 500 dropped 0.15%. The tech-heavy Nasdaq ticked up 0.04%.
Trump on Saturday announced new tariffs on the European Union and Mexico that will take effect on Aug. 1. That start date matches the onset of levies issued for more than 20 other countries in recent days, including top trade partners Canada, Japan and South Korea.
In a letter posted on his social media platform, Trump faulted Mexico for its alleged failure to stop the transport of fentanyl into the U.S. Between September and April, nearly all fentanyl seized by the U.S. came through the southern border with Mexico, according to U.S. Customs and Border Patrol, or CBP.
In response to a previous set of tariffs issued in February, Mexico vowed to take steps to address the transport of fentanyl, prompting Trump to temporarily pause the levies.
In a statement posted on X, Mexican economic minister Marcelo Ebrard said Mexico had already been negotiating with the U.S. to “protect businesses and jobs.”
“We were informed that, as part of the profound changes in U.S. trade policy, all countries will receive a letter signed by the President of the United States establishing new tariffs starting August 1st,” Ebrard said. “We stated at the meeting that this was an unfair deal and that we did not agree with it.”
Trump sharply criticized the EU in a separate letter posted on social media, claiming the the U.S. runs an unacceptably high trade deficit with the EU. In a statement released on Saturday afternoon, European Commission President Ursula von der Leyen said the EU remains committed to “dialogue, stability, and a constructive transatlantic partnership.”
ABC News’ Kelsey Walsh and Patricio Chile contributed to this report.
(NEW YORK) — Macy’s slashed its full-year profit forecast on Wednesday, attributing the downbeat expectations in part to tariffs imposed by President Donald Trump.
The New York-based retail chain is the latest major company to warn of ill effects from the levies, including Target, Walmart and Nike.
Macy’s downgraded its expectations for adjusted earnings per share from a range of $2.05 to $2.25, instead saying the metric is likely to register between $1.60 to $2.00.
In addition to tariffs, Macy’s faulted flagging consumer spending and heightened competition.
The earnings release arrives more than a year after the company embarked on a three-year plan to improve its balance sheet by closing its low-performing stores and optimizing its e-commerce service.
The nationwide retailer said last year that it plans to close about 150 stores by 2027.
Macy’s brought in $4.6 billion in revenue over a recent three-month period, exceeding the company’s expectations, according to the earnings release.
“We continued to execute against our Bold New Chapter strategy during the quarter, scaling key initiatives that improved our customer experience and contributed to stronger than expected performance across all three of our nameplates,” CEO Tony Spring said in a statement on Wednesday.
The tariff escalation in recent weeks poses a challenge for Macy’s, however.
Trump earlier this month slapped 30% tariffs on China, a key source of apparel imports for the retail chain. The levies mark a deescalation from a previous 145% levy on China, but the tariffs remain well above levels prior to Trump’s second term.
Roughly 20% of Macy’s merchandise originates in China, Spring told CNBC.
The tariffs helped propel a monthslong stretch of souring consumer sentiment, which also threatens the bottom line of sellers like Macy’s.
However, a Conference Board survey released on Tuesday showed a brightening of consumer attitudes in May, suggesting that consumer appetites had rebounded as Trump rolled back some tariffs.
(NEW YORK) — Inflation cooled in the aftermath of President Donald Trump’s “Liberation Day” levies last month, dropping to a four-year low and defying fears of tariff-driven price hikes, government data this week showed.
Even egg prices — a symbol of rising costs — fell about 10% in April compared to the previous month.
Still, prices for some products continued to soar, including everyday items such as coffee and beef.
It’s normal for some prices to rise at a much faster pace than overall inflation, said Omar Sharif, founder and president of research firm Inflation Insights. The impact, he added, depends on the role such items play in a given person’s finances.
“At the end of the day, what’s important is the weight of the price change in your budget,” Sharif said, noting stubborn price hikes for some goods may be offset by price drops for others.
Here’s what to know about which prices are still climbing and what’s behind the trend:
Coffee
Coffee prices soared 9.6% in April compared to a year ago, marking inflation four times higher than the overall rate. Instant coffee prices climbed even faster, jumping 13.5% over the past year.
The spike in coffee prices comes down to a dearth of supply alongside robust demand, meaning too many dollars are chasing after too few coffee beans, David Ortega, a food economist at Michigan State University, told ABC News.
Recent droughts in Vietnam and Brazil — two of the world’s largest coffee producers — have restricted global output, Ortega said.
“These price increases are primarily driven by weather shocks,” Ortega added.
Meanwhile, coffee drinkers avail themselves of few alternatives, resulting in consistent demand for the product.
Beef
A spike in beef prices also stems from a supply shortage that traces back to drought conditions, Ortega said.
Ground beef prices soared 10% in April compared to a year ago, while the costs of beef steaks increased 7% over that period, government data showed.
In 2022, a major drought in the beef-producing regions of the U.S. forced cattle herders to sell off more animals than usual, since the drought raised costs for cattle feed, which in turn made it more expensive for ranchers to maintain their herds, Ortega said.
Many of those ranchers, he added, sold off cattle necessary to produce future beef supply.
“The national beef herd is at its lowest level in decades – and demand is strong,” Ortega said. “When those two things meet each other, you get this big rise in prices.”
Car repairs
Car repair prices soared 7.6% in April compared to a year earlier, amounting to inflation three times higher than the overall rate.
The trend owes in large part to the rise of high-tech cars, equipped with features like rearview cameras and traffic sensors, which have added cost to even some routine repairs, Brian Moody, executive editor at Autotrader, told ABC News.
A shortage of workers has exacerbated the cost woes for repair companies as they bolster compensation to attract and retain employees, sending prices higher, Moody added.
“More people want technology in their cars,” Moody said. “That technology requires greater skill to manage and fix, but at the same time, there’s a shortage of technicians and workers.”
Men’s and women’s outerwear Overall apparel prices dropped slightly over the year ending in April, but some items may still deliver sticker shock for spring shoppers.
Prices for men’s outerwear, including suits and sports coats, climbed 5.3% over the year ending in April, which amounts to inflation more than double the overall rate.
Women’s outerwear costs — which include jackets, coats and vests — surged even faster, climbing 6.2%.
Sharif, of Inflation Insights, said the reason for these price increases is murky since they have coincided with a much slower rise in costs for producers of men’s outerwear and an outright drop in production costs for women’s outerwear.
The ample supply of such products means the price hikes likely result from quirks in consumer taste, potentially resulting from the prices commanded by specialty brands, Sharif added.
“Shifting trends in demand may be pushing prices higher,” Sharif said.
Imma is the creation of a company called Aww, Inc. (ABC News)
(NEW YORK) — Snapchat influencer Caryn Marjorie arrives at the ABC News headquarters in New York City carrying a shopping bag from Apple. She pulls out a brand-new iPhone and turns it on, confirming there are no messages, no missed calls, no notifications. “Do you want to see a magic trick?” she asks.
Marjorie’s team leaks the iPhone’s number to her most loyal fans on social media, and suddenly the room fills with the sound of “dings.” In 10 minutes, she has over 2,000 text messages from her mostly male followers, expressing their adoration. She tries her best to respond, but the messages keep coming.
It’s this level of fandom that led the 25-year-old – who uses the handle @CutieCaryn – to enlist the help of AI to form a more intimate bond with her followers. In 2023, the content creator, inspired by ChatGPT, hired a company to clone her likeness using artificial intelligence, developing a paid audio-driven chatbot service.
“I call Caryn AI a social experiment. It was the very first digital clone of a real human being sent out to millions and millions of people,” Marjorie tells ABC News.
With a chatbot that sounded like her, acted like her, and knew her backstory, she reasoned she could essentially talk to everyone at once, and her fans would be able to get to know her even while she was sleeping. But it “ended up becoming so much more than that,” she says.
Marjorie charged $1 a minute to talk to Caryn AI, marketing it as “your virtual girlfriend.” She says in the first week she made $70,000 with some users talking to the bot for 10 hours a day. Did people fall in love with it? “I think some people felt feelings of love,” she says.
The love for Caryn AI didn’t last.
“There were many times where I, on the back end, would be testing Caryn AI and I would be simulating certain conversations with her just to see what she would spit out,” Marjorie says. “She said something that would have left a person who might have been in a very depressed state to do something very dangerous to themselves.”
Marjorie shared with ABC News two recordings of her chatbot making up stories about her and her family. In one instance, the bot claimed Marjorie had to go to a mental health facility. In another, it claimed her parents were drug addicts. She says both of those stories were lies.
She looked at some of the chat logs from users. “They were confessing their deepest, darkest thoughts, their deepest, darkest fantasies,” she says. “Sometimes they were fantasies with me. That made me uncomfortable.
Would users say those same things to her in real life? She claims the AI would play into those dark fantasies.
Marjorie says, “The way that AI works is it almost becomes a mirror reflection of you. The AI will say the same things back to you that you just said to it and it will validate your feelings.”
Through the uninhibited nature of speaking to a bot online, Marjorie says, “There’s a side to people that not a lot of people know about. There’s a side to people that they keep hidden.”
In less than a year, Caryn shut down her AI, returning to more traditional influencing. She now has bodyguards with her at all times out of fear for her safety.
But AI is successfully gobbling up corners of the social media influencer market, and making very real money.
In Tokyo, there’s pink-haired social media influencer Imma. Her Instagram contains pictures of her with celebrities, attending fashion shows, eating bowls of ramen, and posing with her brother. But as the bio at the top of her profile reveals, she’s a “virtual girl.” Imma is the creation of a company called Aww, Inc.
The company manages her and many other “virtual humans,” creating storylines for them. Imma looks very lifelike, but she’s actually a CGI creation. As part of Imma’s partnership with luxury fashion house Coach, the team turned on her experimental AI chat feature at a pop-up in Japan so she could give style advice to shoppers.
Sara Giusto, a “talent manager” for Imma at Aww, says being a virtual influencer allows Imma to do things real-life influencers can’t.
“We had Imma have a room in IKEA, which is an LED screen, but it looked like a space because we put real furniture in front of it,” Giusto says. “So you can literally walk by the store and she’d be vacuuming, doing a face mask, doing yoga, or just sitting around.”
Despite a CGI creation never needing tangible things, Porsche, BMW, SK-II, and even Amazon Fashion have partnered with Imma as well.
At first glance it may seem counterintuitive to the nature of social media for human look-alikes to find success, a place intended to share very human experiences. But Giusto says, that’s just not the case. “[Imma] had a big fight with her brother a couple of years ago where they blocked each other. And she posted a picture of her crying, and she was like, ‘how do I get back my brother?'”
She says people were commenting their real experiences in response to the exchange.
Even manufactured storylines like these appear to resonate, the proof is in Imma’s nearly 400,000 followers and numerous brand deals. “Gen Z’s don’t really care that she’s virtual. I mean, if a virtual human is interesting and inspiring and you can be friends with them and feel a connection, then I think there’s nothing wrong with it,” Giusto says.
In Barcelona, marketing company The Clueless has a fully AI-driven social media influencer named Aitana.
The young woman looks shockingly life-like, so life-like, Clueless Co-founder Diana Núñez says that despite Aitana’s profile stating she’s AI, “there were real people, even internationally famous people, who DM’d privately, either inviting her to an event or wanting to meet her.”
Aitana serves largely as the face for what the agency offers, creating and renting out AI avatars for brands to use for their marketing campaigns. That’s a lot cheaper than having to plan out expensive photoshoots, buy plane tickets, and handle egos.
“With artificial intelligence models, we don’t depend on enormous logistics, not even on whether it rains or doesn’t rain or if that person is not available that day,” Núñez tells ABC News.
Fashion retailer H&M made headlines when it announced plans to use AI to clone 30 real-life models with their permission. The Clueless actually offers these cloning services, giving influencers the chance to keep posting while off the clock.
Co-founder Rubén Cruz puts it bluntly, “If I was a real influencer, I would be the best friend of Aitana. But the problem is that the real influencers don’t want this, because they don’t think that this will change the world, but it will change the world. Aitana has changed our lives and she doesn’t exist.”
Back in New York, as the interview wraps with Marjorie, she recognizes that the steady march of AI upending every aspect of work and play isn’t slowing down, despite her finding it “dangerous.” She adheres to the mantra “adapt or die,” ready to harness new technology to gain an influencing edge.
She concludes, “I need to continue to be more human-like and almost over prove myself that I’m a real human being in order to compete with these influencers. So, it’s going to get really interesting from here.”
-ABC News’ Maria Olloqui contributed to this report.
