Market Update
Tech Weakness Drags Down U.S. Averages for the Fifth Session In a Row
Barry Adams
21 Aug, 2025
New York City
The U.S. benchmark indexes extended losses to the fifth session in a row, driven by a sell-off in tech stocks.
The S&P 500 index declined 0.2%, and the tech-heavy Nasdaq Composite decreased 0.3%, as investors booked profit in high-flying tech stocks.
The leading technology stocks have rebounded as much as 80% from the lows reached on April 21, after worries of a global trade war receded.
Despite the sharp rebound, tariff uncertainty looms, and the de minimis exemption of $800 per day is set to expire today.
U.S. EU Shed More Light on Tariff Details, High Auto Duties to Stay for Now
The U.S. and the European Union announced more details about the trade framework agreed upon in July.
The U.S. is committed to “apply the higher of either the U.S. Most Favored Nation (MFN) tariff rate or a tariff rate of 15%, comprised of the MFN tariff and a reciprocal tariff, on originating goods of the European Union.”
Most goods shipped from the European Union will attract 15% tariffs, including lumber, pharmaceuticals, and semiconductors.
The U.S. tariffs on vehicles shipped from the European Union could drop to 15% from 25% once the EU introduces legislation to remove all tariffs on U.S. industrial goods.
In addition, the European Union will eliminate tariffs on all U.S. industrial goods and provide "preferential market access" to a wider range of U.S. agricultural products and seafood.
Continuing Jobless Claims Near Two Million Mark
Initial jobless claims for the week ending on August 16 advanced to 235,000, an increase of 11,000 from the previous week, according to the U.S. Department of Labor.
Continuing claims, which lags by one week, rose by 30,000 to 1.97 million, and reached the highest level since November 6, 2021.
The jobless claims report provides another data point to policymakers, and confirms the muted hiring activity amid a slowdown in the labor market as businesses struggle with uncertainty stemming from the constantly changing U.S. trade policy.
U.S. Stock Movers
Coty Inc. dropped 21% to $3.85, and the cosmetic company reported weaker-than-expected fiscal first-quarter results.
In addition, the retailer said sales and earnings in the first half are likely to remain depressed before they recover in the second half.
Walmart Inc. decreased 3.2% to $99.36, and the retailer's fiscal second-quarter earnings fell short of market expectations.
Tech Weakness Ext U.S. Averages for the Fifth Session In a Row
Barry Adams
21 Aug, 2025
New York City
The U.S. benchmark indexes extended losses to the fifth session in a row, driven by a sell-off in tech stocks.
The S&P 500 index declined 0.2%, and the tech-heavy Nasdaq Composite decreased 0.3%, as investors booked profit in high-flying tech stocks.
The leading technology stocks have rebounded as much as 80% from the lows reached on April 21, after worries of a global trade war receded.
Despite the sharp rebound, tariff uncertainty looms, and the de minimis exemption of $800 per day is set to expire today.
The U.S. and the European Union announced more details about the trade framework agreed upon in July.
The U.S. is committed to “apply the higher of either the U.S. Most Favored Nation (MFN) tariff rate or a tariff rate of 15%, comprised of the MFN tariff and a reciprocal tariff, on originating goods of the European Union.”
Most goods shipped from the European Union will attract 15% tariffs, including lumber, pharmaceuticals, and semiconductors.
The U.S. tariffs on vehicles shipped from the European Union could drop to 15% from 25% once the EU introduces legislation to remove all tariffs on U.S. industrial goods.
In addition, the European Union will eliminate tariffs on all U.S. industrial goods and provide "preferential market access" to a wider range of U.S. agricultural products and seafood.
U.S. Stock Movers
Coty Inc. dropped 21% to $3.85, and the cosmetic company reported weaker-than-expected fiscal first-quarter results.
In addition, the retailer said sales and earnings in the first half are likely to remain depressed before they recover in the second half.
Walmart Inc. decreased 3.2% to $99.36, and the retailer's fiscal second-quarter earnings fell short of market expectations.
Stock Movers: Home Depot, Medtronic, Toll Brothers
Scott Peters
20 Aug, 2025
New York City
Home Depot Inc. increased 0.1% to $407.69 after the home improvement retailer reported a slight increase in revenue and a marginal decline in net income in the latest quarter.
Consolidated revenue increased 4.9% to $45.3 billion from $43.2 billion, net income inched lower 0.2% to $4.55 billion from $4.56 billion, and diluted earnings per share edged down 0.4% to $4.58 from $4.60 a year ago.
Home Depot estimated full-year total sales to increase by 2.8%, comparable sales to increase by 1%, but diluted earnings per share to decline by 3% from a year ago to $14.91.
The company said it plans to open approximately 13 new stores during the fiscal year 2025.
Medtronic Plc. rose 0.2% to $90.04 after the medical device maker reported a marginal decline in profit in the fiscal first quarter ending on July 25.
Consolidated revenue in the quarter increased 8.4% to $8.6 billion from $7.9 billion, net income inched lower to $1.047 billion from $1.049 billion, and diluted earnings per share edged higher to 81 cents from 80 cents a year ago.
The company guided full-year revenue to rise between 6.5% and 6.8% and non-GAAP earnings per share to rise approximately 4.5% and range between $5.60 and $5.66.
Toll Brothers Inc. declined 1.7% to $130, and the expensive home builder reported a decline in profit in the fiscal third quarter ending in July.
Consolidated revenue in the quarter increased to $2.95 billion from $2.72 billion, net income declined to $369.6 million from $374.6 million, and diluted earnings per share edged higher to $3.73 from $3.60 a year ago.
On July 25, the company paid a quarterly dividend of $0.25 per share to shareholders on record on July 11.
During the fiscal third quarter, Toll Brothers returned a total of $226 million to shareholders through share repurchases and dividends, including the repurchase of 1.8 million shares at an average price of $112.40 per share.
For the fiscal fourth quarter, Toll Brothers expects the average delivered price per home to be between $0.97 million and $0.98 million, the adjusted home sales gross margin to be 27%, and SG&A to be 8.3% of revenue.
The company delivered 2,959 homes at an average price of $974,000, generating record fiscal third-quarter home sales revenue of $2.9 billion, said chairman and chief executive officer Douglas C. Yearley Jr.
In the quarter, the company signed home sales contracts worth $2.41 billion, matching the contract value a year ago, but contracted home units fell 4% to 2,388.
The average sale price of a new home contract was $1.0 million, up 4.5% from a year ago.
The backlog value decreased 10% to $6.38 billion at the end of the third quarter, and homes in backlog were 5,492, down 19% from a year ago, respectively.
Stock Movers: Home Depot, Medtronic, Toll Brothers
Scott Peters
20 Aug, 2025
New York City
Home Depot Inc. increased 0.1% to $407.69 after the home improvement retailer reported a slight increase in revenue and a marginal decline in net income in the latest quarter.
Consolidated revenue increased 4.9% to $45.3 billion from $43.2 billion, net income inched lower 0.2% to $4.55 billion from $4.56 billion, and diluted earnings per share edged down 0.4% to $4.58 from $4.60 a year ago.
Home Depot estimated full-year total sales to increase by 2.8%, comparable sales to increase by 1%, but diluted earnings per share to decline by 3% from a year ago to $14.91.
The company said it plans to open approximately 13 new stores during the fiscal year 2025.
Medtronic Plc. rose 0.2% to $90.04 after the medical device maker reported a marginal decline in profit in the fiscal first quarter ending on July 25.
Consolidated revenue in the quarter increased 8.4% to $8.6 billion from $7.9 billion, net income inched lower to $1.047 billion from $1.049 billion, and diluted earnings per share edged higher to 81 cents from 80 cents a year ago.
The company guided full-year revenue to rise between 6.5% and 6.8% and non-GAAP earnings per share to rise approximately 4.5% and range between $5.60 and $5.66.
Toll Brothers Inc. declined 1.7% to $130, and the expensive home builder reported a decline in profit in the fiscal third quarter ending in July.
Consolidated revenue in the quarter increased to $2.95 billion from $2.72 billion, net income declined to $369.6 million from $374.6 million, and diluted earnings per share edged higher to $3.73 from $3.60 a year ago.
On July 25, the company paid a quarterly dividend of $0.25 per share to shareholders on record on July 11.
During the fiscal third quarter, Toll Brothers returned a total of $226 million to shareholders through share repurchases and dividends, including the repurchase of 1.8 million shares at an average price of $112.40 per share.
For the fiscal fourth quarter, Toll Brothers expects the average delivered price per home to be between $0.97 million and $0.98 million, the adjusted home sales gross margin to be 27%, and SG&A to be 8.3% of revenue.
The company delivered 2,959 homes at an average price of $974,000, generating record fiscal third-quarter home sales revenue of $2.9 billion, said chairman and chief executive officer Douglas C. Yearley Jr.
In the quarter, the company signed home sales contracts worth $2.41 billion, matching the contract value a year ago, but contracted home units fell 4% to 2,388.
The average sale price of a new home contract was $1.0 million, up 4.5% from a year ago.
The backlog value decreased 10% to $6.38 billion at the end of the third quarter, and homes in backlog were 5,492, down 19% from a year ago, respectively.
Japan Indexes Extended 3-Day Sell-Off, Manufacturing Sector Growth Contracted In August
Akira Ito
21 Aug, 2025
Tokyo
Japan's stock market indexes extended losses for the third consecutive session, following a tech sell-off on Wall Street.
The Nikkei 225 Stock Average fell 0.7%, and the broader Topix decreased 0.7%, amid the unwinding of a rally in artificial intelligence-linked stocks.
On the domestic front, Japan's manufacturing sector activities edged closer to stability, but the services sector growth stabilized.
The S&P Global Japan Manufacturing PMI inched higher to 49.9 in August from a final 48.9 in July.
The manufacturing sector activity growth contracted for the 13th month over the past 14-month period.
The weakness in exports, which weighed on the overall activity levels in the sector, highlighted the sector's vulnerability to the U.S. trade policy.
The S&P Global Japan Services PMI slowed to 52.7 in August from 53.6 in July, indicating a softer level of activities.
The composite PMI output index, which includes manufacturing and services, inched higher to 51.9 in August from 51.6 in July.
Japan Indexes and Stocks
The Nikkei 225 Stock Average decreased 0.7% to 42,590.21, and the broader Topix fell 0.5% to 3,084.38.
Tech stocks led the decliners in Tokyo, following the weakness in artificial intelligence-related stocks.
Tokyo Electron Ltd. decreased 2.3% to ¥20,435.0, Advantest Corp. gained 2% to ¥10,975.0, Lasertec Corp. fell 3% to ¥15,655.0, and Disco Corp. eased 1.4% to ¥38,760.0.
Daiichi Sankyo Ltd. decreased 7% to ¥3,718.0, Takeda Pharmaceutical Co. Ltd. edged down 0.7% to ¥4,533.0, and Astellas Pharma dropped 1.1% to ¥1,677.50.
Japan Indexes Extended 3-Day Sell-Off, Manufacturing Sector Growth Contracted In August
Akira Ito
21 Aug, 2025
Tokyo
Japan's stock market indexes extended losses for the third consecutive session, following a tech sell-off on Wall Street.
The Nikkei 225 Stock Average fell 0.7%, and the broader Topix decreased 0.7%, amid the unwinding of a rally in artificial intelligence-linked stocks.
On the domestic front, Japan's manufacturing sector activities edged closer to stability, but the services sector growth stabilized.
The S&P Global Japan Manufacturing PMI inched higher to 49.9 in August from a final 48.9 in July.
The manufacturing sector activity growth contracted for the 13th month over the past 14-month period.
The weakness in exports, which weighed on the overall activity levels in the sector, highlighted the sector's vulnerability to the U.S. trade policy.
The S&P Global Japan Services PMI slowed to 52.7 in August from 53.6 in July, indicating a softer level of activities.
The composite PMI output index, which includes manufacturing and services, inched higher to 51.9 in August from 51.6 in July.
Japan Indexes and Stocks
The Nikkei 225 Stock Average decreased 0.7% to 42,590.21, and the broader Topix fell 0.5% to 3,084.38.
Tech stocks led the decliners in Tokyo, following the weakness in artificial intelligence-related stocks.
Tokyo Electron Ltd. decreased 2.3% to ¥20,435.0, Advantest Corp. gained 2% to ¥10,975.0, Lasertec Corp. fell 3% to ¥15,655.0, and Disco Corp. eased 1.4% to ¥38,760.0.
Daiichi Sankyo Ltd. decreased 7% to ¥3,718.0, Takeda Pharmaceutical Co. Ltd. edged down 0.7% to ¥4,533.0, and Astellas Pharma dropped 1.1% to ¥1,677.50.
Japan Indexes Extended 3-Day Sell-Off, Manufacturing Sector Growth Contracted In August
Akira Ito
21 Aug, 2025
Tokyo
Japan Indexes Extended 3-Day Sell-Off, Manufacturing Sector Growth Contracted In August
Akira Ito
21 Aug, 2025
Tokyo
Japan's stock market indexes extended losses for the third consecutive session, following a tech sell-off on Wall Street.
The Nikkei 225 Stock Average fell 0.7%, and the broader Topix decreased 0.7%, amid the unwinding of a rally in artificial intelligence-linked stocks.
On the domestic front, Japan's manufacturing sector activities edged closer to stability, but the services sector growth stabilized.
The S&P Global Japan Manufacturing PMI inched higher to 49.9 in August from a final 48.9 in July.
The manufacturing sector activity growth contracted for the 13th month over the past 14-month period.
The weakness in exports, which weighed on the overall activity levels in the sector, highlighted the sector's vulnerability to the U.S. trade policy.
The S&P Global Japan Services PMI slowed to 52.7 in August from 53.6 in July, indicating a softer level of activities.
The composite PMI output index, which includes manufacturing and services, inched higher to 51.9 in August from 51.6 in July.
Japan Indexes and Stocks
The Nikkei 225 Stock Average decreased 0.7% to 42,590.21, and the broader Topix fell 0.5% to 3,084.38.
Tech stocks led the decliners in Tokyo, following the weakness in artificial intelligence-related stocks.
Tokyo Electron Ltd. decreased 2.3% to ¥20,435.0, Advantest Corp. gained 2% to ¥10,975.0, Lasertec Corp. fell 3% to ¥15,655.0, and Disco Corp. eased 1.4% to ¥38,760.0.
Daiichi Sankyo Ltd. decreased 7% to ¥3,718.0, Takeda Pharmaceutical Co. Ltd. edged down 0.7% to ¥4,533.0, and Astellas Pharma dropped 1.1% to ¥1,677.50.
China Markets Lacked Direction Amid Mixed Batch of Earnings
Li Chen
21 Aug, 2025
Hong Kong
China and Hong Kong indexes diverged on Thursday as investors focused on the latest batch of earnings and debated the rate path.
The Hang Seng index eased 0.1%, the mainland-focused CSI 300 index inched higher 0.7%, and Hong Kong investors held out for a possible rate cut by the U.S. Federal Reserve next month.
Mainland stocks advanced for the sixth consecutive session amid sustained buying by the large state-controlled institutions and individual investors.
Last week, China released a mixed batch of economic data that is weighing on investor sentiment.
Cautious consumers, persistent residential real estate market weakness, and uncertain U.S. trade policy are some of the key factors denting the market sentiment.
Moreover, the job market is facing additional headwinds as large- and medium-sized businesses accelerate their investments in the ASEAN region, Mexico, and Brazil.
China Indexes and Stocks
The Hang Seng index decreased 0.1% to 25,130.51, and the mainland-focused CSI 300 index edged up 0.7% to 4,301.71.
Baidu Inc. decreased 2.6% to HK $85.10 after the search engine company reported the largest decline in quarterly revenue in about three years.
Meituan dropped 1.5% to HK $119.0, JD.com Inc. fell 0.6% to HK $122.10, and Alibaba Group Holding eased 0.5% to HK $116.80.
Hong Kong Exchanges and Clearing Ltd. edged up 0.6% to HK $443.80, and the financial services provider reported a 39% increase in profit in the first half.
China Markets Lacked Direction Amid Mixed Batch Earnings
Li Chen
21 Aug, 2025
Hong Kong
China and Hong Kong indexes diverged on Thursday as investors focused on the latest batch of earnings and debated the rate path.
The Hang Seng index eased 0.1%, the mainland-focused CSI 300 index inched higher 0.7%, and Hong Kong investors held out for a possible rate cut by the U.S. Federal Reserve next month.
Mainland stocks advanced for the sixth consecutive session amid sustained buying by the large state-controlled institutions and individual investors.
Last week, China released a mixed batch of economic data that is weighing on investor sentiment.
Cautious consumers, persistent residential real estate market weakness, and uncertain U.S. trade policy are some of the key factors denting the market sentiment.
Moreover, the job market is facing additional headwinds as large- and medium-sized businesses accelerate their investments in the ASEAN region, Mexico, and Brazil.
China Indexes and Stocks
The Hang Seng index decreased 0.1% to 25,130.51, and the mainland-focused CSI 300 index edged up 0.7% to 4,301.71.
Baidu Inc. decreased 2.6% to HK $85.10 after the search engine company reported the largest decline in quarterly revenue in about three years.
Meituan dropped 1.5% to HK $119.0, JD.com Inc. fell 0.6% to HK $122.10, and Alibaba Group Holding eased 0.5% to HK $116.80.
Hong Kong Exchanges and Clearing Ltd. edged up 0.6% to HK $443.80, and the financial services provider reported a 39% increase in profit in the first half.
Tariff-Driven Inflation Worries Overshadowed Wall Street Trading Amid Mixed Earnings from Retailers
Barry Adams
20 Aug, 2025
New York City
Wall Street indexes slipped for the second consecutive day amid a broad decline in tech stocks, and investors reviewed the latest batch of earnings from retailers.
The S&P 500 index decreased 0.8%, the Nasdaq Composite dropped 1.4%, and tech stocks led the decliners for the second consecutive session.
Lowe's Companies, Target, and TJX Companies were in focus as investors looked for clues for how consumers are adjusting to rising prices.
Toll Brothers' earnings beat market expectations, but the expensive homebuilder offered a softer outlook, and La-Z-Boy's outlook and quarterly earnings fell short of expectations.
Stock market indexes are struggling near record highs, as tariff worries resurfaced and corporations prepare to pass over higher import fees to consumers from this month.
Food prices soared over the last two months after the U.S. government stepped up detentions of migrant workers on farms and in meat processing facilities and escalated import duties on goods from Brazil, India, Mexico, Chile, Canada, and the European Union.
Moreover, over the last three months, extreme weather across several regions in the U.S. also impacted crop production.
U.S. Stock Movers
Toll Brothers Inc. decreased 1.1% to $130.08, and the expensive home builder reported better-than-expected revenue and earnings in the fiscal third quarter.
The home builder reported record third-quarter earnings, but the company issued a softer outlook.
La-Z-Boy Inc. dropped 20% to $31.25, and the maker of recliners reported a weaker-than-expected earnings per share of 47 cents in the fiscal third quarter.
The company's outlook for the current quarter fell short of market expectations.
Semiconductor makers were in focus after the U.S. Secretary of Commerce, Howard Lutnick, said that the federal government is looking to acquire stakes in companies in exchange for grants under the CHIPS Act.
Intel Corp. decreased 1.6% to $24.90, Micron Technology fell 1.9% to $119.70, and Nvidia Corp. decreased 0.3% to $175.30.
Target Corp. dropped 8.9% to $94.52 after the retailer reported a decline in sales in the second quarter, and same-store sales and consumer transactions also declined.
Net sales in the second quarter declined 0.9% to $2.5 billion, comparable store sales dropped 1.9%, and consumer transactions decreased 1.3%.
However, online sales rose 4.5%, driven by a 25% surge in same-day delivery.
For the fiscal year, the company retained its outlook of a single-digit decline in sales and earnings per share between $8.0 and $10.0.
The retailer estimated adjusted earnings per share, which excludes gains from litigation settlements in the first quarter, to fall between $7.0 and $9.0.
In addition, the company announced that the longtime CEO Brian Cornell would retire in February, and chief operating officer Michael Fiddelke, a two-decade veteran at the company, will assume the post on February 1.
Lowe's Companies Inc. added 1.9% to $261.29 after the home improvement retailer's second-quarter earnings beat expectations.
The do-it-yourself retailer said sales in the fiscal second quarter ending on August 1 increased 1.7% to $24.0 billion, net income advanced to $2.4 billion from $2.38 billion, and diluted earnings per share rose to $4.27 from $4.17 a year ago.
Same-store sales in the quarter rose 1.1% from a year ago.
The company tightened its full-year sales range to between $84.50 billion and $85.50 billion, compared to the previous range between $83.50 billion and $4.50 billion.
The retailer forecast the full-year diluted earnings per share range to be between $12.10 and $12.35, from the previous range between $12.15 and $12.40.
The TJX Companies Inc. increased 5% to $141.46 after the retailer reported better-than-expected quarterly earnings and revised higher its outlook.
Net sales in the fiscal second quarter ending on August 2 rose 7% to $14.4 billion, driven by a comparable sales rise of 4%.
Net income in the quarter rose 15% to $1.24 billion from $1.1 billion, and diluted earnings per share advanced to $1.10 from 96 cents a year ago.
Tariff-Driven Inflation Worries Overshadowed Wall Street Trading Amid Mixed Earnings from Retailers
Barry Adams
20 Aug, 2025
New York City
Wall Street indexes slipped for the second consecutive day amid a broad decline in tech stocks, and investors reviewed the latest batch of earnings from retailers.
The S&P 500 index decreased 0.8%, the Nasdaq Composite dropped 1.4%, and tech stocks led the decliners for the second consecutive session.
Lowe's Companies, Target, and TJX Companies were in focus as investors looked for clues for how consumers are adjusting to rising prices.
Toll Brothers' earnings beat market expectations, but the expensive homebuilder offered a softer outlook, and La-Z-Boy's outlook and quarterly earnings fell short of expectations.
Stock market indexes are struggling near record highs, as tariff worries resurfaced and corporations prepare to pass over higher import fees to consumers from this month.
Food prices soared over the last two months after the U.S. government stepped up detentions of migrant workers on farms and in meat processing facilities and escalated import duties on goods from Brazil, India, Mexico, Chile, Canada, and the European Union.
Moreover, over the last three months, extreme weather across several regions in the U.S. also impacted crop production.
U.S. Stock Movers
Toll Brothers Inc. decreased 1.1% to $130.08, and the expensive home builder reported better-than-expected revenue and earnings in the fiscal third quarter.
The home builder reported record third-quarter earnings, but the company issued a softer outlook.
La-Z-Boy Inc. dropped 20% to $31.25, and the maker of recliners reported a weaker-than-expected earnings per share of 47 cents in the fiscal third quarter.
The company's outlook for the current quarter fell short of market expectations.
Semiconductor makers were in focus after the U.S. Secretary of Commerce, Howard Lutnick, said that the federal government is looking to acquire stakes in companies in exchange for grants under the CHIPS Act.
Intel Corp. decreased 1.6% to $24.90, Micron Technology fell 1.9% to $119.70, and Nvidia Corp. decreased 0.3% to $175.30.
Target Corp. dropped 8.9% to $94.52 after the retailer reported a decline in sales in the second quarter, and same-store sales and consumer transactions also declined.
Net sales in the second quarter declined 0.9% to $2.5 billion, comparable store sales dropped 1.9%, and consumer transactions decreased 1.3%.
However, online sales rose 4.5%, driven by a 25% surge in same-day delivery.
For the fiscal year, the company retained its outlook of a single-digit decline in sales and earnings per share between $8.0 and $10.0.
The retailer estimated adjusted earnings per share, which excludes gains from litigation settlements in the first quarter, to fall between $7.0 and $9.0.
In addition, the company announced that the longtime CEO Brian Cornell would retire in February, and chief operating officer Michael Fiddelke, a two-decade veteran at the company, will assume the post on February 1.
Lowe's Companies Inc. added 1.9% to $261.29 after the home improvement retailer's second-quarter earnings beat expectations.
The do-it-yourself retailer said sales in the fiscal second quarter ending on August 1 increased 1.7% to $24.0 billion, net income advanced to $2.4 billion from $2.38 billion, and diluted earnings per share rose to $4.27 from $4.17 a year ago.
Same-store sales in the quarter rose 1.1% from a year ago.
The company tightened its full-year sales range to between $84.50 billion and $85.50 billion, compared to the previous range between $83.50 billion and $4.50 billion.
The retailer forecast the full-year diluted earnings per share range to be between $12.10 and $12.35, from the previous range between $12.15 and $12.40.
The TJX Companies Inc. increased 5% to $141.46 after the retailer reported better-than-expected quarterly earnings and revised higher its outlook.
Net sales in the fiscal second quarter ending on August 2 rose 7% to $14.4 billion, driven by a comparable sales rise of 4%.
Net income in the quarter rose 15% to $1.24 billion from $1.1 billion, and diluted earnings per share advanced to $1.10 from 96 cents a year ago.
Japan's July Trade Deficit Shrank After Imports Fell Faster than Exports, Core Machinery Orders Rebound In June
Akira Ito
20 Aug, 2025
Tokyo
Japan's benchmark indexes declined for the second consecutive session, following a decline in tech stock on Wall Street in overnight trading.
The Nikkei 225 Stock Average fell 1.5%, the broader Topix index declined 0.6%, and benchmark indexes extended the 2-day sell-off to 2.2%.
Market sentiment was cautious after Japan's exports fell for the third month in a row and dropped at the fastest pace since February 2021.
Exports in July fell 2.6% from a year ago, driven by an 11.4% decline in exports to the U.S., and shipments of vehicles, parts, and semiconductors slowed.
Goods shipments fell 2.6% to 9.4 trillion yen from 9.6 trillion yen, imports declined 7.5% to 9.5 trillion yen from 10.2 trillion yen, and the trade deficit shrank 81.3% to 117.6 billion yen from 628.3 billion yen a year ago.
In July, exports to China declined 3.5%, to the European Union decreased 3.4%, and to the ASEAN region decreased 2.9%, according to the latest data from the Ministry of Finance.
Japan's exports are likely to face additional headwinds after the U.S. sharply escalated tariffs to 15% from 2.5% and extracted a verbal pledge from Japan to invest $550 billion in the U.S. over an unspecified period.
Japan's core machinery orders advanced from the previous month in June, the Japan's Cabinet Office said in a separate release.
Core machinery orders, though volatile, provide a forward-looking capital spending plan over the next six to nine months.
Core machinery orders, which exclude volatile ship and power plant orders, rose 3% to 941.2 billion yen.
On an annual basis, private sector machinery orders accelerated to a 7.6% increase in June from a 4.4% rise in May.
Japan Indexes and Stocks
The Nikkei 225 Stock Average dropped 1.5% to 42,888.55, and the broader Topix declined 0.6% to 3,098.87.
SoftBank Group declined 7.1% to ¥14,890.0, and the diversified investment group extended three-day losses to 16%.
Heavy machinery makers fell despite June's machinery orders rebounding from a two-month slump.
Mitsubishi Heavy Industries decreased 2.2% to ¥3,823.0, IHI Corp. dropped 4.2% to ¥15,800.0, and Fujikura Ltd. fell 5.6% to ¥11,330.0.
Semiconductor equipment makers led decliners following a sell-off in tech stocks in overnight trading on Wall Street.
Tokyo Electron declined 1.4% to ¥20,925.0, Advantest fell 5.7% to ¥10,765.0, and Disco Corp. decreased 4.9% to ¥39,300.0.