Here are five key points investors should be aware of as they begin trading today:
1. New tariffs from Trump
President Donald Trump announced new tariffs on medicines, heavy trucks, kitchen cabinets, and upholstered furniture set to take effect on October 1st. He stated on Truth Social that brands or patented drugs entering the U.S. would incur a 100% tariff, while companies that set up drug manufacturing in the U.S. would be exempt. Heavy trucks would face a 25% tariff, whereas the tariffs for kitchen cabinets and upholstered furniture would be 50% and 30%, respectively.
Earlier, Citadel CEO Ken Griffin warned that the full impact of tariff-induced inflation has yet to hit the U.S. economy. “Only about 50% of the inflationary impulse from tariffs has passed through, and there’s more to come,” he told CNBC’s “Money Mover.”
2. Inflation outlook
In another inflation-related update, the August Personal Consumption Expenditure Price Index is due out at 8:30 AM today. This indicator, favored by the Federal Reserve, is expected to show an increase in inflation.
Here’s what to expect:
- Economists surveyed by Dow Jones predict an increase of 0.3% for that month and 2.7% year-over-year.
- When excluding volatile food and energy prices, “core” PCE is expected to rise by 0.2% from July and by 2.9% compared to last year.
- The stock market is facing its third consecutive loss, as investors assess the state of the AI sector and are also wary of potential government closures next week.
3. TikTok deal approved
Trump approved a deal on Thursday for the sale of TikTok’s U.S. operations, aiming to keep the widely-used app functional in the country. Under the agreement, a new company will take charge of TikTok in the U.S., with the Chinese parent company retaining less than a 20% stake. Oracle, Silver Lake, and the Abu Dhabi-based fund MGX are expected to be leading investors in the U.S. venture.
While China still needs to approve this deal, its announcement brings relief after a prolonged period of uncertainty concerning TikTok’s future in the U.S., following security concerns that mandated a sale or ban.
4. Support for Lisa Cook
Federal Reserve Governor Lisa Cook received backing from former central bank officials amid her legal confrontation with Trump. A letter signed by all living former Fed chairs, Treasury secretaries, and White House economic advisors requests the Supreme Court to intervene regarding Trump’s power to dismiss Cook during the legal process. They argue that allowing her to be fired while her case remains unresolved risks undermining public confidence in the Fed.
In addition, Cook’s legal team urged the Supreme Court to act quickly on this matter.
5. Amazon’s settlement
To settle claims from the Federal Trade Commission, Amazon will cut back certain practices and allow users to pay for membership services directly. The e-commerce giant will face penalties of $1 billion and provide $1.5 billion in refunds to about 35 million customers, marking one of the most significant fines ever imposed by the FTC.
This settlement will lead to a trial scheduled in Seattle Federal Court. Notably, Amazon did not admit to any wrongdoing as part of the resolution.
Daily insights
Check out some noteworthy stories from the weekend if you have time:
