Carter’s, which sells apparel for babies and young children, sank 12.3 per cent after cutting its dividend. New CEO Doug Palladini said the company made the move in part because of investments it anticipates making in upcoming years, as well as the possibility that it “may incur significantly higher product costs as the result of the new proposed tariffs on products imported into the United States.”
On the winning side of Wall Street was Keysight Technologies, which not only topped analysts’ expectations for profit and revenue in the latest quarter but also raised its forecast for growth over its full fiscal year. The hardware, software and services company rose 0.6 per cent.
A growing number of companies have recently said tariffs and uncertainty about the economy are making it difficult to guess what the upcoming year will bring. Others, including Walmart, have said they’ll have to raise prices to offset Trump’s tariffs.
US stocks have recently recovered most of their steep losses from earlier in the year as Trump has delayed or rolled back many of his stiff tariffs. Investors are hopeful that Trump will lower his tariffs more permanently after reaching trade deals with other countries.
In the bond market, the yield on the 10-year Treasury rose to 4.59 per cent from 4.48 per cent late Tuesday and from just 4.01 per cent early last month. That’s a notable move in the bond market.
Such yields effectively show how much in interest governments are having to pay investors in order to borrow money, and they’ve been on the rise for developed economies around the world. That’s partly because governments are continuing to borrow more cash to pay their bills, while central banks like the Federal Reserve have cut back on their own investments in government bonds.
When the US government has to pay more interest to borrow money, that can cause interest rates to rise for US households and businesses too, including rates on mortgages, auto loan rates and credit cards. That in turn can slow the economy.
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Moody’s Ratings became the last of the three major ratings agencies late last week to downgrade the US government’s credit rating on concerns that it may be heading toward an unsustainable amount of debt.
“We do not think that the downgrade matters by itself,” Bank of America strategists wrote in a BofA Global Research report, “but it has served as a wake up call for those investors who had been ignoring the ongoing fiscal discussion.”
In stock markets abroad, indexes were mixed amid mostly modest movements across Europe and Asia
London’s FTSE 100 rose 0.1 per cent after a report said inflation in the United Kingdom spiked to its highest level for more than a year in April.
Tokyo’s Nikkei 225 fell 0.6 per cent after a report said Japan’s exports have slowed due to tariffs
AP
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