Trump Tariffs Send Stocks Lower; Amazon Falls & Apple Gains on Earning

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1:59Learn more at thehartford.com slash risk mitigation. Bloomberg Audio Studios. Podcasts. Radio. News. Good morning. I'm Nathan Hager. And I'm Karen Moscow. Here are the stories we're following today. Karen, yeah, futures are falling this morning after President Donald Trump unleashed his final round of tariff announcements on countries around the world hours before his August 1st deadline. The president slapped 35 percent tariffs on Canadian goods not covered under the U.S.-Mexico-Canada trade agreement. Switzerland's products were hit with a 39 percent rate. And Taiwan's exports are facing a 20 percent duty, though that country says it expects to keep negotiating.

2:45We get more from Bloomberg News Global Trade Editor Brendan Murray. The bottom line here is that the average U.S. tariff rate is going from about 2.5 percent before Trump was sworn in in January to around 15 percent, according to Bloomberg Economics. And that's, in any economist's book, a difficult thing for an economy to absorb. So I think we'll see some more talks going on in the days and weeks ahead. Bloomberg's Brendan Murray says most countries are facing a baseline 10 percent rate, while roughly 40 nations are jumping to 15 percent. The new tariffs won't take effect until August 7th to give U.S.

3:23Customs and Border Protection time to prepare. Former U.S. trade negotiator Stephen Olson says that could add to market uncertainty. We do have a week to go, and this is a man who thrives on chaos and unpredictability and sometimes seems to be running his trade policy like a reality TV show. So until these tariffs actually go into effect on August 7th, let's sit back and see what happens. Former trade negotiator Stephen Olson says President Trump has embraced tariffs for decades, so these moves should not come as a surprise. Well, Nathan, President Trump is also escalating his campaign to pressure pharmaceutical companies to lower drug prices.

4:02And Bloomberg's John Tucker joins us with the very latest. John, good morning. Good morning, Karen. In letters sent to Eli Lilly, Novo Nordisk, Pfizer, and others, Trump insisted the companies immediately lower what they charge Medicaid for existing drugs. He also asked them to guarantee that future medicines be launched and remain at prices on par with what they cost overseas. He gave the world's 17 largest drug makers 60 days to comply. If they don't, he writes, his administration will, quote, deploy every tool in our arsenal to protect American families. The pharmaceutical industry has long protested the idea of globally linked drug prices as a threat to years of U.S.

4:40dominance in biomedical research. They've urged the administration instead to turn its attention to the middlemen in the supply chain. Right now, in European trading, shares of Novo Nord is down another 4.8%. That company loses its spot among Europe's 10 most valuable companies. Pfizer pre-market is down 0.6%. In New York, I'm John Tucker, Bloomberg Radio. Okay, John, thank you. Earnings are also very much in focus this morning. We're watching shares of Amazon. They are down more than 8 % pre-market. The online retail giant is projecting weaker-than-expected operating income and is trailing the sales growth of its cloud rivals.

5:18That has investors questioning whether Amazon's huge investments in artificial intelligence are paying off. Anurag Rana is a senior tech analyst at Bloomberg Intelligence. You see, you know, they met expectations on AWS growth of 17 percent in constant currency. But, you know, this is where we are saying that this is probably not good enough because Microsoft beat by a big number. Google beat by a big number. And the big question is going to be, you know, why didn't Amazon beat by a big number? Bloomberg Intelligence's Anurag Rana says Amazon spent a record$31.4 billion on capital expenditures in the quarter.

5:53That was up about 90 % from the same period a year earlier. On the flip side, Nathan, shares of Apple are up more than 1.5%. The iPhone maker posted its fastest quarterly revenue growth in more than three years. Strong iPhone sales and a rebound in China helped beat estimates despite a projected tariff hit. Mark Gurman covers Apple for Bloomberg. There are people who still have iPhones that are several years old, four to six even older years of iPhone, right? There's people on Android. There's people new to the smartphone market. And clearly, the impact of tariffs didn't have a negative impact on Apple.

6:28It had a positive impact on Apple. That's because a lot of people were anticipating major price hikes to the iPhone, and they flooded Apple retail stores. Bloomberg's Mark Ehrman says Apple predicted that fourth quarter revenue would be up by a percentage in the mid to high single digits. CEO Tim Cook also says the company is upping investment in artificial intelligence. Well, this morning, Karen, the earnings focus turns from big tech to big oil. We'll hear from both ExxonMobil and Chevron. We get a preview from Bloomberg's Tom Busby. Investors at ExxonMobil eager to hear about the company's progress in developing a massive oil field in Guyana.

7:03Also, the latest shale production plants in the Permian Basin. Bloomberg Consensus calls for revenue of$80.39 billion in adjusted earnings per share of$1.56. Chevron investors want to hear about the company's long-delayed but now completed acquisition of Hess and how that will impact its share buyback plans. Bloomberg Consensus calls for revenue of$46.75 billion on adjusted earnings per share of$1.71. Tom Busby, Bloomberg Radio. All right, Tom, thanks. A busy week on the economic front concludes this morning with a July jobs report. Ford economists are forecasting a gain of 104 ,000 jobs and an unemployment rate of 4.2%.

7:41Begin more with Bloomberg's Michael McKee. Job growth will slow and unemployment will have ticked up in July, economists forecast. But it's not the end of the world or even the economic expansion. Once again, it's tariffs. Companies have been suspending guidance and announcing price increases to offset tariffs. But they have not yet resorted to cutting jobs. It won't matter much to the Fed if unemployment does rise by a tenth or so. but a quick jump to, say, 4.5 % would worry policymakers, who may take it as a signal policy is too tight. There will be time to consider the implications no matter what we get.

8:16The next Fed meeting is not until September 17th. Michael McKee, Bloomberg Radio. All right, Mike, thanks. And speaking of the Fed, President Trump is keeping up his pressure campaign on Jay Powell to lower rates, once again taking to social media to criticize the Fed chair. Lyle Brainerd is a former vice chair of the Federal Reserve. What has been surprising to me is to hear the president talk about lowering rates as though it is the Federal Reserve's responsibility to lower rates for U.S. Treasury debt management. And that, of course, is exactly how central banks go wrong in emerging markets.

8:55Former Fed Vice Chair Lyle Brainerd also says she thinks the president's higher tariff rates will hamper economic growth. And finally, Nathan, an end of an era. Ray Dalio has sold his last remaining stake in Bridgewater Associates and also left the hedge funds board. Dalio first announced his succession plan more than a decade ago, but he did not fully hand over the reins until 2022 when he transferred his voting rights to its board of directors and stepped down as one of its three co-chief investment officers. He stayed on the board at the time and Dalio founded the firm in 1975.

9:30Time now for a look at some of the other stories making news in New York and around the world. And for that, we're joined by Bloomberg's Michael Barr. Michael, good morning. Good morning, Karen. Storms have been lashing the east coast from Virginia to Connecticut flooding roadways in New York. Vehicles were stranded in pockets of high water and water pouring over a train in Manhattan's Grand Central Terminal. Commuter rail lines into suburban Long Island and New Jersey were suspended in places. Flash flood warnings in effect for parts of New York City, New Jersey, and Philadelphia. States of emergency have been declared in New Jersey and New York City.

10:07With more on the weather, here's Bloomberg meteorologist Craig Allen. The deluge from last evening, that's gone. There are still some showers around. They'll be moving out of the area. All flood alerts have been canceled. I mean, it must have been frightening for some of those caught in the flooding rains that caused the flash flooding on some of the major interstates around the region. Bloomberg meteorologist Craig Allen. The storms delayed flights from Boston to Washington, D.C. The NYPD and politicians gathered at the funeral Thursday for the officer killed in the Midtown Manhattan mass shooting this week.

10:41Dideril Islam was off-duty working security when he was fatally shot by a gunman at 345 Park Avenue. Islam is one of three funerals these past few days. Also yesterday, funeral services took place for Blackstone executive Wesley Lepatner. Her 14-year-old daughter gave the eulogy. My mom was like my rock, so if we happened, I would talk to her. And I couldn't talk to anyone else. Nothing else would make it better. Funeral services were held for Rudin employee Julia Hyman on Wednesday. Israel's military intelligence agency is undergoing changes. The service is making profound revisions, including reviving an Arabic language recruitment program for high school students and training all troops in Arabic and Islam.

11:30It comes after the October 7, 2023 attack by Hamas. Global news 24 hours a day and whenever you want it. With the Bloomberg News Now, I'm Michael Barr. This is Bloomberg. All right, Michael Barr, thank you.

12:11In the first half of 2026, over$28.1 billion U.S. traded on Moon ATS. Learn more about Moon ATS. Visit otcmarkets.com slash moon. Moon ATS is operated by OTC Link LLC, a FINRA-registered broker-dealer. Quick one before you jump back in. You're listening for ways to help teams move faster, make sharper decisions, and turn scattered context into work they can use. ChatGPT for Business can help. Chat GPT for Business gives teams a shared workspace with admin controls, permissions, and access to work and codecs in Chat GPT. This means your business can move from question to answer and code to rollout quicker.

12:53Join over 10 million business and enterprise users worldwide already using Chat GPT for Work. Download the Chat GPT desktop app or contact sales to learn more. You did it. You wrote the book. But now what? If you're struggling to figure out how to get your manuscript published, Christian Faith Publishing is here to help. They are an author-friendly publisher that works with writers just like you. People with a message, a story, and a purpose. They will guide you through the entire process. Editing, cover design, page layout, printing, distribution. Your book can be available in bookstores and online everywhere readers are looking.

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13:49Time now for the Bloomberg Sports Update brought to you by Flushing Bank. And here's John Stashauer. John, good morning. Good morning, Karen. It was let's make a deal day throughout baseball and perhaps no team busier just before the trade deadline than the Yankees. They had already added three players. They added four more, three relief pitchers. David Bednar was a two-time All-Star in Pittsburgh. Camilo Doval had over 100 career saves while in San Francisco. Jake Byrd comes from Colorado. And then in the eighth inning of the Yanks' 7-4 win over Tampa Bay, they acquired a player who was in the opposing dugout.

14:20Jose Caballero has been baseball's best base stealer the past two seasons. Aaron Boone impressed with what the front office achieved. Love what they were able to do. I think we're a better club today than yesterday. and certainly today than we were last week. And now we know what we were going with and what we got. And, you know, onward. The win over the Rays, the third in a row, they jumped to a 7-0 lead. It was 7-4 when there was a rain delay in nearly three hours and then no scoring after that. Yanks now 3-1 behind Toronto, playing tonight in Miami. The Mets host the Giants. Mets have a new center fielder.

14:57Cedric Mullins spent eight seasons in Baltimore a few years ago, had 30 home runs and stolen bases. Carlos Correa going from Minnesota back to Houston, where he spent seven years, helped the Astros win a World Series. The Red Sox landed pitcher Dustin May from the Dodgers. They beat May in a game a few days ago at Fenway. Taylor Rodgers, whose twin brother Tyler was just acquired by the Mets, was traded for the second day in a row. He's touring the NL Central, went from Cincinnati to Pittsburgh, and now the Cubs. A year ago, the Knicks sent a boatload of draft picks to the Nets. From Mikel Bridges, he averaged 18 points a game, led the NBA in minutes played, and Bridges now has a new contract with the Knicks.

15:35Four years,$150 million. He has never missed a game in his seven-year career. John Stashauer, Bloomberg Sports. Coast to coast on Bloomberg Radio, nationwide on SiriusXM, and around the world on Bloomberg.com and the Bloomberg Business app. This is Bloomberg Daybreak. Good morning. I'm Nathan Hager. Here it is, August 1st, and as promised, President Donald Trump has announced a slew of new tariff rates on countries around the world after announcing deals with a handful of them in recent weeks. But former U.S. trade negotiator Stephen Olson says he wouldn't call these deals. What we've got here are a series of extremely vague framework agreements which will require additional negotiations before they're actually translated into anything, even approximating what we could legitimately refer to to a trade agreement.

16:29Stephen Olson is now a senior fellow at the Institute of Southeast Asian Studies. And for more, we're joined this morning by Bloomberg News senior editor Bill Ferry. So, Bill, what do we have this morning? Good morning. Good morning. So, yeah, we're here. It's been it's been a long, bumpy road since those April 2nd Liberation Day tariffs were first announced. We we've seen a lot of pauses and fits and starts since then. This does seem to be kind of the moment now. President Trump, as you said, unleashed a whole slew of tariffs. Some big surprises in there. Some countries getting more than they bargained for.

17:06And I think the baseline rate of 10 percent, kind of a pleasant surprise to other countries who maybe had been expecting that to increase. So the market's kind of still digesting this. and it's, you know, there are still countries, big, big outliers there like China and India still looking to make deals. So it does seem like the deadline has been reached, but there's still going to be a lot going on in the days and weeks ahead. Well, let's get into that. What could we see over the next few days here, particularly when we're seeing, you know, some countries like Switzerland and Canada getting hit with much higher rates than that 10 % baseline you just mentioned?

17:49Yeah, I think those are two of the big surprises, particularly Switzerland getting a 39 percent tariff when you consider that many of its neighbors who are EU nations got about a 15 percent. Switzerland, of course, exports a huge amount of pharmaceuticals to the U.S., so that's going to have an immediate hit on drug prices once that comes into effect August 7th. And out in Asia, you've seen countries or governments like Taiwan getting 20 percent, while two of its biggest rivals, Japan and South Korea, were at 15 percent. So the effect of these tariffs as it plays out in the days and weeks ahead is going to be shifting kind of the competitive landscape between countries that may have typically competed in similar products but have different rates when it comes to exporting to the U.S.

18:41To your point, I guess we've heard from Taiwan as well that they consider that 20 percent rate that you just mentioned temporary and that more negotiations could be to come. Is that what we should expect here, that even more of these countries could keep negotiating even after this August 1st deadline that's come and gone? Yeah, I mean, so the August 1st deadline, those tariffs are supposed to kick in August 7th in theory, I think. There's going to be time there to negotiate. But yes, I think nations, if they've learned anything about President Trump, it's that he's a dealmaker. He likes to make deals.

19:17The White House may feel like it has made those deals. But I think if a country comes in, if India or Taiwan comes in and they say, you know, they find a way to perhaps buy more American products or make some changes, I don't think that down the road, I think down the road, I think we're going to see more deals getting tweaked. And that's what a lot of governments are going to be banking on going forward. So if we do see these tariff rates kicking in, as you mentioned, on August 7th, once the U.S. Customs and Border Protection gets that time to adjust to this, what's the potential economic impact from where these tariff rates lie now?

20:02It's a huge global economic experiment and an experiment for the U.S. economy. I mean, these tariffs, these U.S. tariffs are now going to be at the highest rate since World War II. And even if some countries are breathing a sigh of relief that they got just 10 percent, and I'm thinking, you know, countries like Singapore, for instance, 10 percent, the average U.S. tariff was about 2 percent six months ago. So these are huge changes, and they will continue to trickle through into the U.S. economy. And it's hard to not see that starting to affect inflation more seriously in the months ahead. And on top of all this, Bill, I guess we're still waiting for a lot of sectoral tariff announcements as well.

20:46I mean, what could that mean when it comes to certainty in the market? Yeah, there is still a lot of uncertainty. There are products, pharmaceuticals are chief among them, semiconductors. Those are still being subject to what the U.S. calls the Section 232 investigations to see if there's a national security risk. And presumably if there are, that allows Donald Trump to put additional tariffs on those products. So by no means is this the end of it just because countries have gotten their number. some of the products they export. Switzerland, I said 39 percent, but a big pharma exporter, they could be seeing increased tariffs on those products once the U.S.

21:32reaches those decisions. And not the end of it, but maybe the market adjustment to what's happening now is just beginning. Thank you for this. Bloomberg News Senior Editor Bill Ferries with us on this August 1st. Karen. Nathan, we're also focusing on the markets and big tech earnings this morning. Shares of Amazon, they are down more than 8%. Apple up. It's higher by almost 2 % right now. And this follows yesterday's After the Bell reports. For more, we're pleased to welcome Bloomberg Radio and TV anchor, Kriti Gupta. Kriti, good morning. Hey, Kriti, let's start with Amazon because it's really hard to ignore the stock move this morning.

22:08What are investors reacting to? Good morning, Karen. Yeah, it's been a really interesting tech earnings story. A tale of two, I think, is fair to say. Amazon shares down by 8%, trading at about$215 a share. This is all about weakness when it comes to Amazon Web Services. When you think Amazon, we think about the packages, we think about the e-commerce business, but ultimately they are pivoting firmly in the tech direction, and that's where they've disappointed the market. Now, it doesn't help that we also got Microsoft earnings just 24 hours before, which really set a positive tone for cloud adoption for the Azure kind of services that they had.

22:43So the expectations were pretty high for Amazon to impress the market. And to be fair, they did in some ways. Their revenues did come in better than expected, but not by much. And this is a market that is very tough on tech companies right now, that the expectations are high and you have to be even better than the expectations. You have to get an A++ instead of just an A+. And this is where Amazon kind of finds itself right now. because they're also talking about weaker than expected operating income as well as some of the sales growth when it comes to AWS. So that big idea of spend big on AI, spend big on cloud, and see that kind of multiply ultimately over time, that's the shadow of doubt that's being cast from Wall Street this morning.

23:26And it really did seem like CEO Andy Jassy had a longer view when it came to all of this, but he still couldn't ease those concerns on the earnings call, could he? He couldn't. And he's trying to use that magic word that I think we've seen in not just the tech companies and the tech space, but across corporate America and arguably the global corporate sphere, which is artificial intelligence. And there was an era where every time you said artificial intelligence, the stock would just spike because of this kind of momentum driven story. And he's making that point. He says, look, we're very early days in that investment story.

23:56We know Amazon has that massive anthropic venture as well. And they are competing with the likes of Alphabet, Microsoft, Oracle, among others as well in the cloud space. he's saying give it some time. But this is now at a point where Wall Street is looking at these AI kind of expectations, looking at these AI investments and say, when is it going to pay off? And Andy Jassy wasn't able to make that case. Alright, well we're seeing better reaction to Apple this morning. It reported fastest revenue growth in more than three years. What else did you take away from this? You know, it's funny because we go into Amazon with such a strong earnings expectations.

24:31With Apple you went in with some pretty beat up earnings expectations. The idea that the tariff story would really eat into the bottom line, would eat into the supply chains, especially as Apple tries to move their supply chain from China to India. And you actually saw the opposite on two key fronts. One, that so much of those tariff fears actually showed up and people buying iPhones ahead of time, expecting the prices to go up. So that was good news for their bottom line revenue, but also the fact that they are actually doing better than expected in China. And this has been a key sticking point for Apple because Apple is ultimately an American luxury product.

25:05There are plenty of competitors in Asia as well, and they haven't been able to have the foothold and the growth in that part of the world that they were really hoping for, to the point that just this week it's been reported that they shuttered their first retail store in China, really kind of showing that weakness that they've had there. I think it's crucial, though, that Apple has, at least today, convinced investors that that is no longer the narrative. The question now moving forward is can it sustain that growth in the iPhone picture, but also in Asia. This is Bloomberg Daybreak, your morning podcast on the stories making news from Wall Street to Washington and beyond.