U.S. President Donald Trump is expected to soften the blow of his automotive tariffs by preventing duties from stacking on top of other tariffs he has imposed, while also scaling back some duties on foreign parts, the Wall Street Journal reported on Monday. 

The move will mean that U.S. automakers paying Trump’s automotive tariffs will not be subject to other duties, such as those on steel and aluminum, the WSJ report said, citing people familiar with the matter. 

The move will also be retroactive, meaning that automakers could be reimbursed for tariffs they have already paid, the WSJ report said. 

Trump also plans to modify its tariffs on auto part imports, which will allow automakers to be reimbursed for up to an amount equal to 3.75% of the value of a U.S.-made car for one year, the WSJ report said.

Trump’s 25% tariffs on finished imported cars took effect in early April, while a 25% duty on foreign auto parts is set to take effect from May 3.

Trump is expected to announce the tariff relief before a trip to Michigan for a rally outside Detroit on Tuesday evening, the WSJ said.

The potential tariff relief is likely aimed at allowing automakers more time to shift supply chains to the U.S., in line with Trump’s tariffs. 

Trump’s auto tariffs had ramped up concerns over heightened car costs in the U.S., given that even cars manufactured domestically still import a wide variety of components. 

U.S. stocks saw modest gains on Monday, with the Dow and S&P 500 ending fractionally higher and the Nasdaq ending fractionally lower, as investors digested the latest comments from U.S. Treasury Secretary Scott Bessent and looked ahead to earnings reports from megacap American companies with a combined market value of around $20 trillion.

The Dow Jones Industrial Average closed up 114 points or 0.28%, while the S&P 500 index eked out a gain of 3 points, or 0.06%. The NASDAQ Composite index saw a small drop of 17 points, or 0.1%.

Trade hopes

Stocks were able to add to last week’s gains on hopes that the U.S. would start to announce some trade deals.

"There remains a lot of hope and hype about trade deals, and this might prevent a sharp slump in the SPX in the immediate term, but the index is at the top-end of its trading range and shouldn’t be chased beyond ~5500," Vital Knowledge analyst Adam Crisafulli said in morning’s note to clients. 

In an interview with CNBC on Monday, Secretary Bessent said many countries have offered ’very good’ tariff proposals to the U.S.

"We are continuing to make substantive movement on negotiations with many of our trading partners," Bessent stated. "The negotiations with our Asian trading partners are going very well; the negotiations with the Republic of Korea have gone very well; the VP’s negotiations with India went very well; and I think we’ve had some very substantial negotiations with our Japanese allies."

He also stated that all aspects of the U.S. government are in contact with China and that it is up to China to de-escalate the situation.

The Trump administration has shown signs of wanting to ease tensions in the ongoing trade war, which has rattled markets and fueled fears of a global recession. 

Earnings ahead: Apple, Microsoft, Amazon, Meta 

Investors were eyeing earnings from the “magnificent seven” megacaps, including Apple Inc (NASDAQ:AAPL), Microsoft Corporation (NASDAQ:MSFT), Amazon (NASDAQ:AMZN), and Meta Platforms Inc (NASDAQ:META), this week.

"The Q1 earnings season (and Q1 economic data) have been decent, but this is in part because the full effects of tariffs haven’t been felt – that will soon change," Crisafulli added. 

Microsoft and Meta are set to report on Wednesday, while Apple and Amazon are scheduled to report their earnings on Thursday.

These reports are key to gauging corporate resilience amid ongoing tariff tensions and capital expenditure worries around AI.

Earnings from other major sectors, like Visa (NYSE:V), Coca-Cola Co (NYSE:KO), and Caterpillar Inc (NYSE:CAT), were all due this week.

(Ayushman Ojha, Senad Karaahmetovic and Sam Boughedda contributed to this article).

Most Asian stocks advanced on Friday, with technology shares tracking stellar overnight gains in their U.S. peers following stronger-than-expected earnings from Google owner Alphabet.

Japanese markets were the best performers in the region, as optimism over U.S. trade talks helped them rally past hotter-than-expected Tokyo inflation data that pushed up expectations of more interest rate hikes by the Bank of Japan. 

Regional markets took a positive lead-in from Wall Street, which closed substantially higher on Thursday amid some optimism over trade talks between the U.S. and China. Hints of more interest rate cuts by the Federal Reserve also aided gains. 

U.S. stock index futures rose in Asian trade, with Nasdaq 100 Futures up 0.5% following strong earnings from Alphabet Inc (NASDAQ:GOOGL). 

Asia tech stocks boosted by Alphabet, AI optimism 

Tech-heavy bourses such as Hong Kong’s Hang Seng, South Korea’s KOSPI, and Japan’s Nikkei 225 were the top gainers, advancing between 0.6% and 1.4% with the Nikkei in the lead. 

Gains in tech came following U.S. stocks, after internet giant Alphabet clocked substantially stronger-than-expected earnings and flagged no changes in its artificial intelligence ambitions. 

Before that, tech stocks were also boosted by both Amazon.com (NASDAQ:AMZN) and Nvidia (NASDAQ:NVDA) stating that AI-driven demand for chips and data centers was likely to remain solid, helping ease some fears of an investment slowdown in the sector. 

The storm of positive factors helped spur buying into tech stocks, which were the most hit by a prolonged market downturn so far in 2025. 

Among individual stocks, Baidu (NASDAQ:BIDU) Inc (HK:9888) soared 4% in Hong Kong trade after the Chinese internet giant launched updated versions of its flagship Ernie AI model. Electric vehicle maker BYD (HK:1211) rose 0.7% before its March quarter earnings, which are due later in the day. 

Japan stocks rise past hot Tokyo CPI on trade deal hopes

Gains in tech boosted the Nikkei, while Japan’s TOPIX also added 1.1%.

This came even as Tokyo consumer price index inflation rose sharply in April, beating expectations and granting the BOJ more headroom to raise interest rates. 

The central bank is widely expected to keep interest rates steady when it meets next week, but expectations for more hikes later this year are growing steadily.

Japanese markets have been on a tear this week after reports showed government officials were set to begin a new round of U.S. trade talks later this month.

Chinese stocks muted, trade deal hopes scattered 

China’s Shanghai Shenzhen CSI 300 and Shanghai Composite indexes lagged their peers, moving in a flat-to-low range on Friday. 

Underperformance in Chinese markets came as investors fretted over the long-term economic impact of a bitter trade war with the United States, after Washington and Beijing exchanged steep trade tariffs earlier this month. 

Markets were little enthused by mixed signals on trade talks. U.S. President Donald Trump claimed his administration was in dialogue with China, while Beijing said no trade talks had taken place. 

Broader Asian markets were mostly negative amid persistent risk aversion. Singapore’s Straits Times index shed 0.5%, while futures for India’s Nifty 50 index pointed to a flat open.

U.S. stock index futures rose on Thursday evening as investors piled into technology and artificial intelligence stocks following strong earnings from Google owner Alphabet, which also helped put trade uncertainty on the backburner. 

Futures rose following another strong session on Wall Street, with tech gaining after Amazon.com and Nvidia flagged strong demand for AI data centers. Stronger-than-expected earnings from AI software developer ServiceNow Inc (NYSE:NOW) also aided tech stocks. 

Investors were encouraged by President Donald Trump stating that talks with China were underway, although Chinese officials said no trade talks had taken place. Focus remained squarely on potential reductions in U.S. tariffs, amid heightened concerns over the economic impact of the trade war. 

S&P 500 Futures rose 0.4% to 5,531.0 points, while Nasdaq 100 Futures rose 0.5% to 19,427.25 points by 19:46 ET (23:46 GMT). Dow Jones Futures lagged, trading sideways at 40,260.0 points. 

Alphabet surges on strong earnings, boosts tech 

Alphabet Inc (NASDAQ:GOOGL) shares rallied nearly 5% in aftermarket trade, after the company clocked much stronger than expected earnings for the first quarter and announced a $70 billion buyback. 

The company also reaffirmed its ambitious AI development plans, offering more confidence that AI-driven demand for chips and data centers will persist. The company is among Wall Street’s biggest spenders on AI.

Still, Alphabet did flag some potential headwinds from macroeconomic uncertainty, while growth in its ad business revenue, which is its biggest moneymaker, also shrank from the prior quarter .

But Alphabet’s earnings set a strong precedent for other major Wall Street tech stocks, especially those with heavy exposure to AI. 

Amazon.com Inc (NASDAQ:AMZN) and NVIDIA Corporation (NASDAQ:NVDA) rose more than 1% each after hours, while chipmaker TSMC (NYSE:TSM) added 0.5%. 

More major tech earnings are due in the coming days, with Microsoft (NASDAQ:MSFT) and Apple (NASDAQ:AAPL) set to report next week. 

Gains in tech stocks were a major boost to Wall Street on Thursday. The S&P 500 rose 2% to 5,484.78 points, while the NASDAQ Composite rose 2.7% to 17,166.04 points. The Dow Jones Industrial Average rose 1.2% to 40,093.40 points. 

Consumer earnings underwhelm, Intel slides 

Beyond most tech firms, earnings from other sectors were less upbeat, especially in sectors sensitive to economic ructions. Procter & Gamble Company (NYSE:PG), Chipotle Mexican Grill Inc (NYSE:CMG), American Airlines Group (NASDAQ:AAL), Skechers USA Inc (NYSE:SKX), and PepsiCo Inc (NASDAQ:PEP) all cut or withdrew their guidance due to uncertainty over consumer spending. 

Intel Corporation (NASDAQ:INTC) slid 5% in afterhours trade as weak guidance offset consensus-beating earnings, with the struggling chipmaker also flagging heightened concerns over macro headwinds from a trade war.

A barrage of company earnings are due in the coming weeks, although focus will be more on guidance for the current year, especially in the face of heightened economic uncertainty.

By Joyce Lee, Hyunjoo Jin and Nandita Bose

SEOUL/WASHINGTON (Reuters) -South Korea and the United States agreed to craft a package of deals aimed at removing new U.S. tariffs before the pause on reciprocal tariffs is lifted in July, Seoul’s delegation said after the first round of trade talks in Washington.

The U.S. and South Korea had a "very successful" meeting on Thursday, U.S. Treasury Secretary Scott Bessent said afterwards.

"We may be moving faster than I thought, and we will be talking technical terms as early as next week," he told reporters.

Bessent and Trade Representative Jamieson Greer met with South Korean Finance Minister Choi Sang-mok and Industry Minister Ahn Duk-geun.

Neither side offered details on possible areas of agreement, but South Korea said in a statement it requested exemptions from reciprocal and item-specific U.S. tariffs, and offered cooperation on shipbuilding and energy as well as addressing trade imbalances.

"During the meeting, the two countries reached a broad agreement on the framework for future discussions," Ahn later told reporters. "We also agreed to hold working-level talks next week to determine the scope and structure of talks, with the goal of producing a ’July package’ by July 8."

Choi said more talks will be held in South Korea on May 15-16 with Greer.

"Discussions will focus on four key areas: tariffs and non-tariff measures, economic security, investment cooperation, and currency policy," Choi said.

AUTOS IN FOCUS

The discussions with South Korea took place as Bessent and other Trump administration trade team members met with a multitude of foreign finance and trade officials looking to strike tariff deals on the sidelines of this week’s meetings of the International Monetary Fund and World Bank Group in Washington.

South Korea, which faces 25% U.S. reciprocal tariffs, is among the first countries the Trump administration has initiated trade talks with, after its first face-to-face discussions last week with Japan, another key Asian ally slapped with 24% tariffs. Bessent was also due to meet Japanese officials on Thursday.

Choi said South Korea focused in particular on the automobile sector, which faces the greatest negative impact.

He also said South Korea’s finance ministry and U.S. Treasury will hold separate discussions on currency policy.

Choi told South Korean reporters that there was no mention of defense costs during the talks. Trump has previously said that sharing the cost of keeping U.S. troops in South Korea would be part of "one-stop shopping" negotiations with Seoul. But South Korea’s foreign minister said defense costs are separate matters from trade talks.

Ahn said there was no mention of the renegotiations of a bilateral free trade deal signed in 2017.

The South Koreans also asked for understanding from the Americans that the process could be affected by the "political schedule," apparently referring to the looming June 3 snap election in South Korea, which was called after former President Yoon Suk Yeol was ousted for his role in imposing martial law in December.

Acting President Han Duck-soo has expressed willingness to reach a deal, saying the country will not fight back against Washington as it owes the U.S. for its recovery from the 1950-1953 Korean War.

That has faced pushback from the liberal opposition who are favoured to win in the election, accusing Han of rushing talks for political gain.

Experts have also noted it may be difficult for South Korea to make any firm commitment on energy projects and defence costs under an acting president.

Trump’s energy security council plans to host a summit in Alaska in early June, when it hopes Japanese and South Korean officials will announce commitments to the Alaska LNG project, a source familiar with the matter said on Thursday.

Most Asian stocks rose marginally on Thursday as investors second-guessed recent optimism over a deescalation in the U.S.-China trade war, although Japanese markets outperformed on reports of more U.S. trade dialogue. 

South Korean markets were an exception, with the KOSPI lagging its peers after gross domestic product data showed an unexpected contraction for the first quarter. This largely offset positive earnings from memory chip major and Nvidia (NASDAQ:NVDA) supplier SK Hynix. 

Broader Asian markets tracked overnight gains on Wall Street, as investors were encouraged by U.S. President Donald Trump flagging an eventual, albeit unspecified reduction in trade tariffs on China. Trump’s cooling rhetoric against the Federal Reserve also aided sentiment. 

U.S. stock index futures trickled higher in Asian trade. But optimism over Trump’s comments was seen cooling, given that Trump signaled any deal with China will require Beijing to approach Washington- a scenario that Chinese officials have shown little indication will play out.

Comments from other U.S. officials also raised some doubts over a U.S.-China deescalation. 

Japan shares lead gains on trade talk reports 

Japanese markets were the best performers on Thursday, with the Nikkei 225 adding nearly 1%, while the TOPIX rose 0.8%. 

A slew of media reports said Japan’s Economic Revitalization Minister Ryosei Akazawa will visit the U.S. later this month for a second round of trade negotiations. 

A separate report on Wednesday showed U.S. officials stating that they will not offer Japan special treatment from Trump’s trade tariffs. But Japanese ministers were seen maintaining their calls for smaller tariffs and more transparent trade agreements. 

South Korea’s economy unexpectedly contracted in the first quarter of 2025, weighed down by political unrest in the country and concerns around U.S. trade polices, preliminary data from the central bank showed. 

Gross domestic product contracted 0.2% quarter-on-quarter in the three months to March 31, in contrast with expectations of a steady 0.1% rise.

Year-on-year GDP shrank 0.1%, also missing estimates of 0.2% growth, and compared with a 1.2% rise in the fourth quarter of 2024.

The contraction is largely attributed to weakening exports, a result partly influenced by the protectionist trade policies implemented by U.S. President Donald Trump.

While Trump declared a 90-day pause on reciprocal duties, South Korea is still subject to a 25% tariff on steel and automobiles.

This coincided with significant political unrest in South Korea following President Yoon Suk Yeol’s declaration of martial law in December 2024. Yoon was later impeached 

The political crisis deepened when acting President Han Duck-soo was also impeached in late December. Finance Minister Choi Sang-mok then assumed the role of interim leader. The turmoil has eroded investor confidence and disrupted governance, contributing to the nation’s economic challenges.

Last week, the Bank of Korea (BOK) maintained its key interest rate at 2.75% to support the struggling Korean won, which recently hit a 16-year low while hinting at possible rate cuts in upcoming months. 

The S&P 500 closed higher Wednesday, but well off session highs, as US Treasury Secretary Scott Bessent cooled some optimism on a quick resolution to the U.S.-China trade standoff.   

At 4:00 p.m. ET (21:00 GMT), the Dow Jones Industrial Average rose 450 points, or 1.2%, the S&P 500 index gained 1.6%, and the NASDAQ Composite climbed 2.5%.

Bessent cools quick U.S-China trade resolution

Bessent said there was no unilateral offer from President Donald Trump to lower China trade tariffs, adding doubt to an earlier Wall Street Journal report that suggesting Trump was willing to reduce the 145% tariffs on China. 

The remarks injected a sense of reality into the current U.S.-China trade standoff and suggest that the Trump administration could be waiting for China to make the first move. 

But China President Xi Jinping isn’t expected to cave in at the first offer of a trade truce from the Trump administration, FOX Business reported, citing unnamed CEOs with close ties to Chinese government.

This suggest the current trade standoff between the world’s two biggest economies could continue for a while longer, dampening earlier optimism for a quick resolution. 

On Tuesday, Trump that high tariffs on China will come down “substantially,” but “it won’t be zero.” 

Tesla rises as Musk vows to reduce DOGE activity

In the corporate sector, Tesla (NASDAQ:TSLA) stock jumped 6%, after the electric vehicle manufacturer reported first-quarter profits at its core auto business that were better than rock-bottom estimates.

Also contributing to the positive tone was the news that CEO Elon Musk plans to reduce the time he devotes to the Trump administration from next month and spend more time running the EV giant, especially amid slumping sales.

Elsewhere, Intel (NASDAQ:INTC) stock gained more than 5% after Bloomberg reported the chipmaker is set to unveil plans this week to slash more than 20% of its workforce, in a move to streamline operations and reduce bureaucratic inefficiencies.

Philip Morris (NYSE:PM) stock climbed more than 2% after the tobacco giant posted a solid first-quarter report, and raised its full-year 2025 earnings guidance.

Boeing (NYSE:BA) stock surged 6% after the aircraft manufacturer posted its first growth in quarterly revenue since 2023.

On the flip side, Enphase (NASDAQ:ENPH) stock slumped 15% after the energy technology company’s first-quarter results missed expectations, while the low end of its second-quarter revenue outlook also fell short.

(Peter Nurse, Ambar Warrick contributed to this article.)

By Andy Bruce

LONDON (Reuters) -Britain’s government borrowed almost 15 billion pounds more in the financial year that just ended than official budget forecasters had estimated a month ago, according to data that heaped more pressure on the public finances.

Public sector net borrowing for the 2024/25 financial year was 151.9 billion pounds ($202.1 billion), the Office for National Statistics said on Wednesday.

In its forecasts published in March, the Office for Budget Responsibility had projected a budget deficit for the financial year ending in March of 137.3 billion pounds.

With finance minister Rachel Reeves’ budget plans hinging on a tiny buffer against the government’s self-imposed fiscal rules - equivalent to less than 1% of annual spending - investors are watching public sector finance data more closely.

British government bonds have become increasingly volatile in recent years, reflecting unease in financial markets over Britain’s mix of low growth, high debt interest costs and persistent inflation.

"We will never play fast and loose with the public finances, that’s why our fiscal rules are non-negotiable," said deputy finance minister Darren Jones in a statement.

As a percentage of economic output, the budget deficit in 2024/25 was 5.3%, up from 4.8% in 2023/24. The OBR last month projected a reading of 4.8% for the year just ended.

Alison Ring, director of public sector and taxation at the ICAEW professional body for chartered accountants, said tax hikes enacted on businesses this month should help the public finances later this year - at least in theory.

"Unfortunately, the public finances remain vulnerable to the economic headwinds caused by those tax rises that, together with a global trade war, are likely to put significant pressure on the chancellor," Ring added, referring to Reeves.

The Institute for Fiscal Studies think tank said the data showed the risk of running a budget with only 10 billion pounds of room to spare before running afoul of the fiscal rules by 2029/30.

In March alone, the government borrowed 16.444 billion pounds, the ONS said, compared with the median forecast of 16.0 billion pounds in a Reuters poll of economists.

Debt interest costs in March stood at 4.3 billion pounds - a record for the month.

The ONS revised up borrowing for the previous 11 months of the 2024/25 financial year, largely reflecting new data that showed a weaker picture for tax receipts, including corporation and income taxes.

The Debt Management Office said on Wednesday it planned to issue more Treasury bills in response to the 2024/25 borrowing overshoot, rather than British government bonds.

($1 = 0.7517 pounds)

China’s major internet companies, including ByteDance, Alibaba (HK:9988), and Tencent (HK:0700), stockpiled billions of dollars worth of Nvidia’s (NASDAQ:NVDA) H20 artificial intelligence (AI) chips ahead of U.S. restrictions on their export, Nikkei Asia reported on Wednesday citing sources.

The three companies rushed to secure around one million H20 chips — nearly a full year’s supply — in anticipation of the U.S. cutting off shipments in April, the Nikkei report said.

These chips, specifically designed to comply with U.S. export controls, are vital for AI applications, particularly inference tasks.

ByteDance, one of the most aggressive buyers, and other firms reportedly placed rush orders worth over $12 billion, with several billion dollars’ worth shipped before the new restrictions took effect earlier this month, according to the report.

The H20 is a downgraded version of Nvidia’s H100 chip, popular in China due to its lower power requirements compared to the original model.

Earlier this month, Nvidia said it would take a $5.5 billion hit in the first quarter due to the new restrictions.

With the new curbs, Chinese firms are looking at alternatives like Huawei’s Ascend chips and exploring ways to bypass the export restrictions, including setting up overseas subsidiaries, Nikkei reported.

The stockpiling comes amid surging demand for AI computing power in China, fueled by the rise of applications like DeepSeek integrated into Tencent’s WeChat.