The three major stock indices on the New York Stock Exchange closed mixed within a range. This is interpreted as a reflection of the reluctance towards risk assets, following reports that U.S. President Donald Trump is demanding a minimum 15% tariff from the European Union (EU).
On the 18th (local time), the Dow Jones Industrial Average closed down 142.30 points (0.32%) at 44,342.19 on the New York Stock Exchange (NYSE). The Standard & Poor's (S&P) 500 index fell 0.57 points (0.01%) to 6,296.79, while the Nasdaq Composite Index rose 10.01 points (0.05%) to 20,895.66.
According to major foreign media reports, Trump is demanding a minimum 15% to 20% tariff on all negotiation items with the EU. Maroš Šefčovič, the EU Commissioner for Trade, reportedly conveyed to the EU ambassador that negotiations are difficult. A U.S. government official noted to the media that even if both sides reach an agreement, Trump is considering a reciprocal tariff of more than 10%.
Earlier, Trump announced that he would impose a 30% tariff on all imports from the EU starting from the 1st of next month. A minimum 15% tariff is a lower level than this. However, given that the market initially viewed the 30% tariff as a negotiating tactic, it seems the figure of 15% is also being perceived with some burden.
Christopher Waller, a member of the Federal Reserve (Fed), publicly urged for a rate cut in July. In interviews with the media and at public events, he stated consecutively, "There is no substantial reason to delay a rate cut," and it is "reasonable for the Federal Open Market Committee (FOMC) to lower the policy rate by 25 basis points (1 basis point = 0.01 percentage points) in two weeks."
The rate cut in July is a minority opinion within the Fed. The Fed officials advocating for it include Waller and Michelle Bowman, the Fed's vice chair for supervision. However, as Waller, mentioned as a candidate for the next Fed chair, continues to argue for an early rate cut, the futures market is also responding positively.
According to the CME FedWatch Tool, the probability of a 25 basis point rate cut in September indicated in the federal funds rate futures market stood at 57.9% around the market close. The previous day's closing probability was 50.8%. However, the stock market did not notably react to Waller's call for a rate cut.