US stocks close down slightly amid tariff uncertainty
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(NEW YORK) — U.S. stocks closed down slightly on Tuesday as investors weathered ongoing uncertainty about President Donald Trump’s tariff plans.
The Dow Jones Industrial Average ticked down 156 points, or 0.3%, at the close of trading. The S&P 500 fell 0.1%, while the tech-heavy Nasdaq declined 0.05%.
The U.S. has received about 15 proposals for trade agreements, White House Press Secretary Karoline Leavitt told reporters on Tuesday. Trump issued a 90-day pause of so-called “reciprocal tariffs” last week, saying he plans to negotiate trade agreements with roughly 75 countries targeted by the levies.
The remarks from Leavitt came a day after Trump signaled a willingness to ease auto tariffs, while saying he plans to impose new tariffs on computer chips and pharmaceuticals
Trump’s administration said on Friday that many consumer electronics would be exempt from his wide-ranging reciprocal tariffs, an announcement that sent global markets higher on Monday.
Trump on Monday also indicated a willingness to further ease tariffs, saying he is looking to “help some of the car companies” in the aftermath of 25% auto levies.
The White House also took steps on Monday that may result in new tariffs on pharmaceuticals and semiconductors, posting notices online about national security investigations into those products.
Markets in Europe also traded higher midday on Tuesday, after European Commission President Ursula von der Leyen’s 90-day pause on planned tariff countermeasures went into effect.
Germany’s DAX climbed about 1.21% midday and Britain’s FTSE 100 traded up about 0.90% midday.
South Korea’s KOSPI index closed up 0.88% on Tuesday, posting its second day of gains. And Tokyo’s Nikkei 225 climbed 0.84%.
Markets in China, where Trump’s reciprocal tariffs are still in place, showed less enthusiasm. Shanghai’s Composite Index rose just 0.15% and Hong Kong’s Hang Seng Index climbed 0.23%.
ABC News’ David Brennan contributed to this report.
Marcus Wells, a barista at Float Coffee in Hollywood, Calif., speaks, April 8, 2025, about the impact the global tariff war will have on his business. KABC
(NEW YORK) — Americans’ love affair with coffee and chocolate could soon get a lot more expensive.
Baristas and confectioners say the beans they need to make their products are mostly grown in countries targeted by the Trump administration’s tariffs.
According to the U.S. Department of Agriculture, the United States is the world’s second-largest importer of coffee. In a reflection of how much Americans love chocolate, U.S. businesses import about $5 billion worth of cocoa beans a year, according to the USDA.
Some owners of small businesses dealing in coffee and confections say they fear the tariffs imposed by President Donald Trump will leave them with no choice but to pass the added costs on to their customers.
“So while the tariffs are being imposed to try to up the production of goods in the United States, that’s a good we just simply cannot make in the United States,” Marcus Wells, a barista at Float Coffee in Hollywood, California, told ABC Los Angeles Station KABC of the coffee beans he imports from Central and South American countries that are currently are under a 10% baseline tariff imposed by the Trump administration.
Trump announced on Wednesday that he was pausing reciprocal tariffs on most countries for 90 days, except China.
Wells said the baseline tariff of 10% will likely translate to a 10% increase in a cup of coffee at his shop.
“We’re always looking for ways to maintain customers and it’s hard to do that when you’re constantly having to raise prices in order to keep your business open,” Wells said.
Cason Crane, CEO of Explorer Cold Brew, a company that sells bottled and canned coffee at stores across the nation, told ABC News that he hopes the 90-day pause will allow enough time for countries to negotiate deals with the White House to stave off the higher reciprocal tariffs.
“Coffee has actually been exempt from tariffs in the United States since the 1800s. So, my hope is that, with this 90-day pause, while it’s not ideal to still have 10% tariffs, that the administration can negotiate some more targeted deals that recognize things like the United States cannot grow coffee outside of Hawaii or Puerto Rico, which account for half a percent of worldwide coffee production,” Crane said.
Before Trump put a pause on reciprocal tariffs on Wednesday, Bill Ackman, the billionaire CEO of the hedge fund Pershing Square Capital Management and a supporter of Trump, posted a lengthy message on social media, saying, “If the president doesn’t pause the effects of the tariffs soon, many small businesses will go bankrupt.”
In his post, Ackman shared an email he received from Crane, whose company he has invested in. In the email, Crane said the price of glass bottles he sources from China for his coffee will go up 50%, while chai sourced from India will increase by 26% and coffee imported from Ethiopia, Peru and Canada will climb by 10%.
“Will my clients tolerate a near doubling of their contract costs overnight, or will they expect me to absorb the increases my vendors are already threatening?” Crane wrote in the email. “If clients resist price hikes and my employees demand higher wages to offset their rising cost of living, we end up in a lose-lose scenario — no spending and no jobs.”
On Thursday, Crane told ABC News that he likely won’t be able to raise prices.
“Small businesses have way fewer options than big businesses. We don’t really have the capability to raise our prices,” Crane said. “Think about going to a farmers market; you’re already paying a little bit more. So, we’re already priced at the top range and we don’t really have the power to negotiate with our suppliers like the big businesses do. So the best I can do is keep holding on and hope for a better policy, and urge people to look out for those small businesses.”
New Hampshire chocolatier Richard Tango-Lowy, owner of Dancing Lion Chocolate in Manchester, said he imports some of his cocoa beans from Vietnam, which Trump says faces a 46% reciprocal tariff if it doesn’t bargain with the White House. Tango-Lowy said he also gets beans from Bolivia, which is subject to the baseline 10% tariff.
“We have about 600 kilos of beans on the way from Bolivia. We have no idea what they will cost right now,” Tango-Lowy told ABC affiliate station WMUR in Manchester.
Tango-Lowy said much of his packaging comes from Hong Kong, which is subject to China’s tariffs.
“We work domestically where we can, but a lot of what we do is not available domestically,” Tango-Lowy said. “It just doesn’t exist.”
Tango-Lowy is bracing to have to absorb the tariffs, saying, “We’re going to need the beans at some point.”
As food and beverage companies contemplate if they will or can’t cover the tariffs without raising prices on customers, Andrew Sinclair, owner of Mad Lab Coffee in Los Angeles, said his prices will stay the same.
“If you had to pay $9 for a cup of coffee I probably wouldn’t see you every day, and I like seeing people every day,” Sinclair told KABC. “So we’re going to keep our prices the same.”
Sinclair said he trusts his longstanding partnerships with growers in Colombia and Ethiopia will help him weather the economic turmoil.
“If you can afford a good cup of coffee, go to your local coffee shop and grab a good cup of coffee,” Sinclair said. “And if you can’t afford it, please don’t buy a cup of coffee and end up not being able to pay your rent. That’s just not responsible.”
(NEW YORK) — President Donald Trump’s tariffs sent stocks tumbling in recent weeks, but the uncertainty helped propel a different asset viewed as a safe haven: gold.
The price of gold topped $3,000 per ounce for the first time ever last week, and the precious metal continued to hover around that mark in early trading on Monday.
Gold prices have soared 12% so far this year, while the S&P 500 has plummeted nearly 7%. Over that period, the Dow Jones Industrial Average has dropped 2% and the tech-heavy Nasdaq has tumbled 8.5%.
The rush toward gold makes financial sense, experts said. The asset offers investors a hedge against uncertain stock performance, since gold prices often display a degree of independence from movements in equities markets.
However, gold prices carry volatility of their own, some experts added, especially when buyers enter the market at a high point, risking losses instead of providing a security blanket. “Investors need to be careful,” Campbell Harvey, a professor at Duke’s Fuqua School of Business who studies commodity prices, told ABC News.
“At a time of heightened uncertainty, people look toward a safe haven – and gold is a perceived safe haven. But most people don’t realize that gold is volatile,” Harvey added.
The run-up in gold prices comes amid a market slump set off by an escalating global trade war.
Last week, the S&P 500 closed down more than 10% since its high in February, meaning the decline officially qualified as a market correction. It marked the index’s first correction since October 2023. At the same time, the Dow suffered its worst one-week drop-off since 2023.
“Right now, it’s a very anxious marketplace,” Jim Wyckoff, senior market analyst at Kitco Metals, told ABC News. “That’s been a detriment for stock-market bulls and a boom for gold-market bulls.”
The flight to gold in moments of market crisis draws on decades of evidence, according to an analysis co-authored by Harvey in 2020. The price of gold moved higher during seven of the last nine major stock market selloffs stretching back to the late 1980s, researchers found.
“It’s a good track record, but it’s not a sure thing,” Harvey said. “Even though it went up seven out of nine of these drawdown periods, that doesn’t mean it will be seven out of nine in the next nine drawdowns.”
Last week, Paris-based financial firm BNP Paribas raised its forecast for gold prices, predicting the precious metal would exceed $3,100 an ounce. The company attributed the rosy outlook to economic uncertainty incited by Trump, but it warned such gains would likely fizzle out by the second half of this year.
“The gold market will price in or normalize Trump-driven trade risks, as it typically does with geopolitical risk,” BNP Paribas said in a report shared with ABC News. “Thus, if there is no ongoing escalation in trade tensions, gold prices will, in our view, struggle to maintain further upside momentum.”
Some experts who spoke to ABC News acknowledged the current price boom may eventually lose steam, but they still encouraged investors to add the precious metal to their portfolios as a means of offsetting the heightened risk of stocks.
“Gold offers diversification,” Trevor Yates, an analyst at investment firm Global X, told ABC News. “We see gold warranting a place in the portfolio.”
Investors who add gold for the sake of diversifying their portfolio, however, may want to add other assets alongside it, such as Treasury bonds or real estate, Harvey said.
“There are other safe assets besides gold,” Harvey said. “Don’t put all of your eggs in one basket.”
(DALLAS) — A shift is on the horizon at Southwest Airlines. The carrier known for its customer-friendly policies and affordable airfare announced changes to its baggage and fare structure in an effort to cater to a broader range of travelers.
While the low-cost airline has long stood out for offering two free checked bags for all passengers, starting May 28, some customers will see charges for checked baggage.
The most notable change from the Dallas-based carrier that was announced Tuesday impacts those not holding certain status levels with Southwest’s Rapid Rewards program.
Southwest Airlines will continue to offer two free checked bags to Rapid Rewards A-List Preferred Members as well as its Business Select travelers.
A-List Members and other select customers will still receive one free checked bag, the airline said. However, those without qualifying status will now face a charge for their first and second checked bags, subject to weight and size limitations.
“We have tremendous opportunity to meet current and future customer needs, attract new customer segments we don’t compete for today, and return to the levels of profitability that both we and our shareholders expect,” President and CEO Bob Jordan said.
Why Southwest is changing baggage fees?
For passengers traveling on lower-priced fares, such as Wanna Get Away or Wanna Get Away Plus, the changes outlined reflect a move toward more targeted options for a range of travelers from budget conscious to frequent flyers, which the airline hinted at in December.
Southwest Rapid Rewards program points changes, assigned seats and more
In addition to the new baggage fees, Southwest’s Rapid Rewards program will also have some changes for earning points.
Customers who fly Business Select will earn more points, while those on lower-tier options — like Wanna Get Away fares — will earn fewer.
The airline is also introducing a new Basic fare category for the lowest-priced tickets starting May 28 ahead of rolling out assigned seating and extra legroom options.
“We’re evolving our business to create more choice for our current and future customers,” Jordan said.
Southwest is working to expand its reach with flights now available to book through Expedia, and an industry-standard partnership with Icelandair.
Flight credits issued for tickets purchased on or after May 28 will expire one year or earlier from the date of ticketing, depending on the fare type purchased.
