Stocks soar as US and China agree to slash tariffs
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(NEW YORK) — U.S. stocks soared at the open of trading on Monday, just hours after the U.S. and China announced an agreement to slash tariffs for 90 days as the world’s two largest economies negotiate a wider trade deal.
The Dow Jones Industrial Average climbed 1,005 points, or 2.4%, while the S&P 500 jumped 2.7%. The tech-heavy Nasdaq increased 3.8%.
Best Buy, an electronics retailer that previously warned of tariff-induced price hikes, saw shares surge more than 10%.
Tesla, the electric carmaker led by White House advisor Elon Musk, jumped more than 5%.
The U.S. agreed to cut tariffs on Chinese goods from 145% to 30%, while China committed to reduce tariffs on U.S. products from 125% to 10%.
The previous set of sky-high tariffs had threatened a surge in prices and a possible U.S. recession, experts told ABC News.
The move marks the latest rollback of far-reaching tariffs initiated by President Trump during a Rose Garden ceremony on April 2 that the president dubbed “Liberation Day.”
Days after the announcement, Trump suspended so-called “reciprocal tariffs” on dozens of countries.
“Increasingly, it’s as if the last 6 weeks have been a bad dream and never actually happened,” Deutsche Bank told clients on Monday in a memo shared with ABC News.
The U.S.-China accord came two days after an hours-long discussion between U.S. and Chinese officials in Geneva, Switzerland on Saturday.
Jonathan Pingle, chief U.S. economist at Swiss investment bank UBS, on Monday estimated the reduction in U.S. levies on China would bring average U.S. tariffs down from 24% to 14%.
In a statement to ABC News, Pingle described the agreement between the U.S. and China as a “cooling off.”
This is a developing story. Please check back for updates.
(NEW YORK) — Stocks were mixed on Thursday after a panel of federal judges blocked President Donald Trump from slapping some of his far-reaching tariffs on China and other major U.S. trading partners.
The Dow Jones Industrial Average fell 25 points, or 0.06%, while the S&P 500 increased 0.3%. The tech-heavy Nasdaq climbed 0.6%
The ruling from the U.S. Court of International Trade late Wednesday marked a major blow for Trump’s tariff policy, invalidating levies on dozens of countries unveiled in a Rose Garden ceremony that Trump had dubbed “Liberation Day.”
Trump later paused those so-called “reciprocal tariffs” for 90 days, embarking on trade negotiations with the target nations that remain ongoing.
A separate set of tariffs focused on Mexico and Canada over their alleged role in the fentanyl trade fell victim to the court’s decision. The ruling also invalidated a 10% tariff imposed on goods from nearly all countries.
The Trump administration appealed the ruling within minutes, leaving the ultimate fate of the tariffs unclear.
The ruling centered on Trump’s unprecedented invocation of the International Economic Emergency Powers Act as a legal justification for tariffs.
The 1977 law allows the president to stop all transactions with a foreign adversary that poses a threat, including the use of tools like sanctions and trade embargoes. But the measure does not explicitly permit tariffs, putting Trump in untested legal territory.
The ruling afforded the Trump administration as many as 10 days to halt the tariffs.
Even before the court’s decision, Trump had rolled back some of the levies at issue.
A trade agreement between the U.S. and China earlier this month slashed tit-for-tat tariffs between the world’s two largest economies and triggered a surge in the stock market. Within days, Wall Street firms softened their forecasts of a recession.
The U.S.-China accord came weeks after the White House paused the reciprocal tariffs. Trump eased duties on some goods from Mexico and Canada.
The ruling did not impact sector-specific tariffs used under separate legal statutes, including levies targeting autos, steel and aluminum.
(NEW YORK) — A group of cybercriminals hacked into data systems at insurance company Aflac, possibly gaining access to sensitive information such as Social Security numbers and health reports, the company said on Friday.
Aflac, which boasts millions of customers, “identified suspicious activity” and “stopped the intrusion within hours,” the company said.
The company attributed the attack to a “sophisticated cybercrime group” but did not identify the organization.
The cyberattack marks the latest in a string of data breaches targeting insurance companies, including attacks earlier this month against Philadelphia Insurance Companies and Erie Insurance.
“This attack, like many insurance companies are currently experiencing, was caused by a sophisticated cybercrime group. This was part of a cybercrime campaign against the insurance industry,” Aflac said in a statement. The company has opened an investigation into the cyberattack, saying initial findings indicate the cybercriminals deployed “social engineering tactics” or measures that rely on manipulation to gain network access.
Information tied to customers’ insurance claims and personal data may also have been breached in the cyberattack, Aflac said.
“We regret that this incident occurred,” Aflac said. “We will be working to keep our stakeholders informed as we learn more and continue investigating the incident.”
Aflac generated nearly $19 billion in revenue last year, which marked a 1.2% increase over the previous year, according to an earnings release.
(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.
