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US announces new tariff rates ahead of trade talks

deadline

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Asian shares set for worst week since April, Nasdaq

futures dip

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Dollar set for 2.4% weekly gain, best in nearly 3 years

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US jobs data pivotal for Sept rate cut hopes

(Adds quote in paragraph 5, updates prices throughout)

By Nell Mackenzie and Stella Qiu

LONDON/SYDNEY, Aug 1 (Reuters) - Global shares tumbled

on Friday after the U.S. slapped dozens of trading partners with

steep tariffs, while investors anxiously awaited U.S. jobs data

that could make or break the case for a Fed rate cut next month.

The Stoxx 600 fell around 1% in the first hour of trading.

It was 1.7% lower on the week, on track for its biggest weekly

drop since early April.

Both Nasdaq futures and S&P 500 futures were

down around 1%.

Late on Thursday, President Donald Trump signed an executive

order imposing tariffs ranging from 10% to 41% on U.S. imports

from foreign countries. Rates were set at 25% for India's

U.S.-bound exports, 20% for Taiwan's, 19% for Thailand's and 15%

for South Korea's.

He also increased duties on Canadian goods to 35% from 25%

for all products not covered by the U.S.-Mexico-Canada trade

agreement, but gave Mexico a 90-day reprieve from higher tariffs

to negotiate a broader trade deal.

"The August 1 announcement on reciprocal tariffs are

somewhat worse than expected," said Wei Yao, research head and

chief economist in Asia at Société Générale.

Market reaction was not as volatile as April's global asset

declines, she added. "We are all getting much more used to the

idea of 15-20% tariffs being manageable and acceptable, thanks

to the worse threats earlier."

MSCI's broadest index of Asia-Pacific shares outside Japan

fell 1.5%, bringing the total loss this week to

roughly 2.7%.

Japan's Nikkei closed 0.6% lower, Chinese blue chips

ended 0.5% down and Hong Kong's Hang Seng index

lost more than 1%.

Overnight, Wall Street failed to hold onto an earlier rally.

Data showed inflation picked up in June, with new tariffs

pushing prices higher and stoking expectations that price

pressures could intensify, while weekly jobless claims signalled

the labour market remained on a stable footing.

Fed funds futures imply just a 39% chance of a rate cut in

September, compared with 65% before the Federal Reserve held

rates steady on Wednesday, according to the CME's FedWatch.

Much now will depend on the U.S. jobs data due later in the

day and any upside surprise could price out the chance for a cut

next month. Forecasts are centred on a rise of 110,000 in July,

while the jobless rate likely ticked up to 4.2% from 4.1%.

The greenback found support from fading prospects of

imminent U.S. rate cuts, with the dollar index up 1.5% this week

against its peers to 100, in the biggest weekly rise

since late 2022.

The tariff news appeared to have little impact on the

Canadian dollar, which was last up 0.15%.

The yen was the biggest loser overnight, but

recovered 0.2% to 170.5 yen. The Bank of Japan held interest

rates steady on Thursday and revised up its near-term inflation

expectations, but Governor Kazuo Ueda sounded a little dovish in

the press conference.

Two-year Treasury yields fell one basis point to

3.9428%, while benchmark 10-year yields ticked up 2

basis points to 4.382%, after slipping 2 bps overnight.

In commodity markets, oil prices continued to fall after a

1% overnight plunge. Brent fell 24 cents to $71.46 per

barrel, while U.S. crude fell 27 cents to $68.99 per

barrel.

Spot gold prices were up 0.1% to $3,294 an ounce.