This is the way it works. For example we’re looking for a smartphone manufactured by Dapple, which has simply launched two new fashions: a $1,200 mannequin with a giant display and a $900 one that’s extra compact. The costlier smartphone will function the “anchor” by which we make comparisons, so the $900 mannequin will look like worth for cash — even whether it is pricey in absolute phrases. However we’re possible to be ok with selecting it as a result of we have “saved” $300 on our buy.

This situation appears to be what’s taking place with the usJapan commerce settlement freshly introduced late Tuesday stateside. U.S. President Donald Trump mentioned Washington would acquire entry to Japan’s markets for rice and automobiles — which had been sticking factors throughout negotiations — whereas the latter would see 15% tariffs on its exports to America.

At first look, that does not sound too constructive for Japan. However buyers celebrated the information — the Nikkei 225 jumped 3.8% at 1:45 a.m. ET. In spite of everything, a 15% tariff price is a giant enchancment from the 25% tariff Trump slapped on Tokyo earlier this month. Moreover, Japanese auto exports to the U.S. — which made up 28.3% of all shipments in 2024 — will face a tariff of 15%, decrease than the common 25% different nations are topic to.

As Brian Jacobsen, chief economist at Annex Wealth Administration, mentioned, “It is a signal of the occasions that markets would cheer 15% tariffs. A yr in the past, that degree of tariffs could be surprising. At the moment, we breathe a sigh of reduction.” That, in essence, is the anchoring impact at play.

The U.S. and Indonesia agree on a commerce framework. Imports into the U.S. from Indonesia will be set at 19%, whereas items flowing from America to the Southeast Asian nation can be tariff-free, based on a joint assertion issued by the White Home on Tuesday.

Tariff suspension with China more likely to be prolonged. The U.S. and China’s 90-day tariff pause expires on Aug. 12. Nevertheless, U.S. Treasury Secretary Scott Bessent mentioned the U.S. can be “working out what is likely an extension.”

The S&P 500 ticks as much as a recent report. That is the index’s 11th record close in 2025. On Tuesday, the Dow Jones Industrial Average additionally rose, however the Nasdaq Composite slipped. Japan’s Nikkei 225 jumped over 3% on Wednesday, fueled by a surge in auto stocks.

[PRO] Tailwinds from China’s $167 billion mega-dam challenge. China has kicked off building on the world’s largest hydropower dam, and analysts anticipate suppliers of the project to obtain an enormous increase.

Chinese and EU leaders are about to meet — but the U.S. is complicating things

China and the European Union will maintain a top-level assembly in Beijing on Thursday, whereas the U.S. is making their already tense relationship extra difficult.

Clashes over commerce and financial coverage, technological points and protection and safety have been commonplace between China and the EU — and tensions have just lately been heating up.

— Sophie Kiderlin

Clarification: This report has been up to date to mirror that firms pay tariffs.