GM Falls 8% After $1 Billion Tariff Hit

General Motors dropped 8.1% after reporting a $1 billion hit to earnings from US tariffs, raising concerns among investors as earnings season continues. Japanese automakers surged, with Toyota up 15% and Mazda 17%, after the US and Japan agreed to cut auto tariffs to 15%, lifting Japan’s Nikkei by 3.2% to a one-year high. The dollar rose 0.2% to 146.9 yen after reports that Japan’s Prime Minister Ishiba will resign, while markets await results from Tesla, Alphabet, and IBM later today.

Equities

The FTSE 100 rose 0.1% to close at a record high of 9,023.81 on Tuesday, supported by gains in major mining stocks as copper prices strengthened. Glencore climbed 3.1%, Rio Tinto rose 2.2%, and Antofagasta added 1.8%, all benefiting from renewed hopes for stronger demand from China. The mid-cap FTSE 250 fell 0.4%.

Centrica advanced 4.8% after the UK government approved the £38 billion Sizewell C nuclear power station. The energy company, which holds a 15% stake in the project, gained on optimism about its long-term returns. Compass Group increased 5.4% after announcing the €1.5 billion acquisition of European premium foodservice firm Vermaat Groep and raising its full-year profit forecast.

Greencore jumped 12%, leading the FTSE 250, after upgrading its annual profit guidance. Pennon rose 2.5% following an upgrade to "overweight" from J.P. Morgan. Other water utilities also rose, with United Utilities and Severn Trent both up over 2.2%. Kier Group dropped 4.9% after CEO Andrew Davies confirmed he would step down, with Stuart Togwell named as successor from 1 November. Legal & General lost 2.1% after RBC Capital Markets downgraded the stock to "underperform".

In the US, the S&P 500 added 0.06% to close at 6,309.62, a fresh record. The Dow Jones rose 0.40% to 44,502.44, while the Nasdaq slipped 0.39% to 20,892.69. Nine of the S&P 500’s eleven sectors rose, led by healthcare, which was up 1.9%, and real estate, up 1.78%.

General Motors shares slumped 8.1% after reporting a $1 billion hit to quarterly earnings from tariffs. Ford fell 1% as concerns around US trade policy grew. RTX dropped 1.6% after cutting its 2025 profit forecast, citing pressure from trade tensions, despite strong demand in its engines and services business. Lockheed Martin fell nearly 11% after reporting an 80% drop in quarterly profit.

Philip Morris fell 8.43% after second-quarter revenue missed expectations, with weaker-than-anticipated ZYN nicotine pouch shipments weighing on results. Tesla rose 1.1% ahead of its earnings report due Wednesday, while Alphabet added 0.65%. Meta and Microsoft each declined around 1%.

Forex & Commodities

The dollar remained under pressure on Wednesday after US President Donald Trump confirmed a trade agreement with Japan, which included a 15% tariff rate—lower than the expected 25%—and a commitment from Tokyo to invest $550 billion in the United States.

The dollar index hovered near a two-week low at 97.48, having declined 6.6% since early April when the tariffs were first announced. The yen briefly strengthened to 146.20 per dollar following the news but later weakened to 146.92 after reports that Japanese Prime Minister Shigeru Ishiba would step down next month. The euro traded at $1.1737, down 0.15% but still close to a four-year high, while sterling was little changed at $1.3527.

Gold eased 0.2% to $3,422.95 per ounce after touching its highest level since mid-June earlier in the session. US gold futures also fell 0.2% to $3,436.10. The modest decline followed the trade deal announcement, which lifted risk sentiment. However, a weaker dollar and lower US Treasury yields helped limit the downside. Ten-year Treasury yields hit their lowest since 9 July. Spot silver fell 0.2% to $39.20, platinum slipped 0.1% to $1,439.65, and palladium was down 0.2% to $1,272.50.

Oil prices inched higher after three consecutive daily losses. Brent crude rose 21 cents, or 0.31%, to $68.80 a barrel, while US West Texas Intermediate gained 17 cents to $65.48. Industry data showed a drop in US crude and gasoline stocks last week, while distillate inventories rose by 3.48 million barrels. Expectations for progress at Thursday’s EU-China trade summit remain low. In Washington, the US energy secretary indicated further sanctions on Russian oil were under consideration.