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Stocks are slumping Tuesday as more caution creeps into financial markets worldwide.

The S&P 500 was 1% lower in early trading, following up on losses for stocks across Europe and much of Asia.

The Dow Jones Industrial Average was down 370 points, or 1%, at 35,102, as of 9:50 a.m. Eastern time, and the Nasdaq composite was 1.3% lower.

In the U.S., bank stocks dropped after Moodys cut the credit ratings for several smaller and midsized ones amid a long list of concerns about their financial strength.

Across the Pacific, stocks sank 1.8% in Hong Kong and 0.3% in Shanghai after a report showed exports for Chinas troubled economy shrank by the most since the start of the pandemic in 2020.

The worries layered on top of a mixed set of earnings reports from big U.S. companies.

UPS fell 3% after it cut its forecast for revenue this year. It reported stronger profit for the spring but weaker revenue.

Eli Lilly helped to limit the markets losses after jumping 16.4%.

The medicine developer reported profit and revenue for the spring that both topped analysts expectations.

More jolts may be ahead for markets.

The U.S. government later in the morning will report how many job opening were available across the country in June, a test of how resilient the job market remains.

Economists expect a separate report to show U.S. manufacturing continues to struggle under the weight of much higher interest rates.

The Federal Reserve has hiked its main interest rate to the highest level in more than two decades in hopes of grinding down inflation.

High rates work by slowing the entire economy bluntly, which has raised the risk of a recession but also helped inflation to moderate since its peak last summer.

Besides manufacturing, high rates have hit banks particularly hard. Moodys said the rapid rise in rates has led to conditions that hurt profits for the broad industry, while knocking down the value of investments made when rates were super low.

Such conditions helped cause three high-profile failures for three U.S. banks earlier in the spring, which shook confidence in the system.

Moodys also said troubles may be coming for banks with lots of commercial real estate loans, which are hurting as the threat of a U.S. recession remains and work-from-home trends keep people out of offices.

M&T Bank, one of the banks whose credit rating Moodys downgraded, fell 4.7%.

Truist Financial, one of the banks that Moodys said its reviewing for a possible downgrade, fell 4.5%.

Other, larger banks whose credit ratings weren’t affected also sank.

JPMorgan Chase fell 2% and was one of the heavier weights on the S&P 500.

Later this week, the U.S. government will releases data on consumer and wholesale inflation, which could influence what the Federal Reserve does next with interest rates.

The hope on Wall Street is that the cooldown in inflation since its peak above 9% last summer will help persuade the Fed that upward pressure on prices is under control and no more rate hikes are needed.

Forecasters expect Thursdays data to show consumer prices rose by 3.3% in July over a year ago, an acceleration from Junes 3%.

But some economists and investors say getting that list bit of inflation moderation to the Fed’s target of 2% is likely to be the most difficult.

They’re saying Wall Street has become convinced too quickly that the Fed can achieve a soft landing for the economy and that the 19.5% run for the S&:P 500 through the first seven months of this year was overdone.

In the bond market, Treasury yields tumbled as investors moved into investments considered safer.

The yield on the 10-year Treasury fell to 3.98% from 4.10% late Monday. It helps set rates for mortgages and other loans.

The two-year Treasury yield, which more closely tracks expectations for the Fed, fell to 4.73% from 4.79%.

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Are Donald Trump’s film tariff threats making investors ‘dither’ in UK?

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Are Donald Trump's film tariff threats making investors 'dither' in UK?

At West London Film Studios – where major productions from Bridget Jones’s Baby to Killing Eve have all filmed – while Apple TV+’s Ted Lasso is currently being shot in one of their 10 sound stages (across two sites), it pains owner Frank Khalid that one of his biggest stages is empty.

But he has a theory as to why – Donald Trump’s social media posts threatening tariffs on films made outside the US.

“Prior to [Trump] posting that we had quite some big major features come to us looking for space,” he says, “and it’s just gone very quiet since he posted… maybe it’s a coincidence, I don’t know, but I believe it has affected us.”

Frank Khalid, owner of West London Film Studios
Image:
Frank Khalid, owner of West London Film Studios

In September, on his social media platform Truth Social, Trump wrote that America’s “movie making business has been stolen….by other countries…like…’candy from a baby’.”

Repeating a threat he’d first made last May, he claimed he’d authorised his government departments to put a “100% tariff on any and all movies that are made outside of the United States”.

For bigger studios, like Pinewood and Elstree, block-booked years in advance by the major movie producers, his words haven’t had any immediate effect.

But, at smaller studios, like Khalid’s, he certainly feels like there’s been a ripple effect.

More on Donald Trump

“We had a letter from one major big American production saying [the tariff] is not possible, [Trump] legally can’t do it… but at the end of the day, he doesn’t have to do it, the damage is done, isn’t it? By him just posting that… the confidence in the market goes down.”

As Jon Wardle, director of the National Film and Television School, explains, the industry has “always been a bit feast or famine, and we’re in a slight lull… it’s not quite the boom of what it was in 2022 after COVID, but probably at that point we were making a few too many projects.”

Jon Wardle says the UK 'needs to be more committed to homegrown talent'
Image:
Jon Wardle says the UK ‘needs to be more committed to homegrown talent’

Wardle says, Trump’s threatened tariffs are certainly likely to make film companies “slightly more nervous” and “dither a bit more” when it comes to signing off on projects a few years down the line.

But he says it’s important to remember that US studios have “invested hugely” in the UK.

“Disney has a 10-year lease at Pinewood, Amazon has a 10-year lease at Shepperton, the investment for those companies is massive. And the other part of this is that it’s not going to be cheaper to make those films in America. In fact, it’ll be more expensive.”

West London Studios has 194,000 square feet of production space and is one of the UK’s leading independent studios
Image:
West London Studios has 194,000 square feet of production space and is one of the UK’s leading independent studios

While the UK industry appears to be finding its feet after the knock-on effects of COVID shutdowns and the US writer’s strike, some smaller studios say Trump’s tariff threats are certainly on their radar.

Farnborough International Studios told us that while it has “recently hosted major TV series for companies such as Paramount and Amazon”, it has “seen film bookings and enquiries slowing down since the first sign of imposed tariffs”.

While West Yorkshire’s Production Park said they’d “not seen any slowdown”, a spokesperson for their studios said they are “tracking wider policy changes that could affect us”.

Mr Wardle says: “I think is it’s a good warning to the UK industry. I think the UK needs to take more seriously the commitment to its own homegrown talent. How do you make projects that aren’t funded and paid for by Americans or another nation?”

This year's London Film Festival
Image:
This year’s London Film Festival


With little detail for now, few working within the industry can fathom how a tariff would deliver the happy ending of shoots returning to Hollywood that Donald Trump might desire without driving up costs and stifling investment.

“There’s a huge number of questions about how you actually make tariffs work,” Mr Wardle explains. “It seems like a silly example, but production accountants: we train production accountants and nowhere else in the world does… we planted those seeds 20 years ago and we’re now reaping the rewards.

“It’s not going to be cheaper to make those films in America… so they’ll just make less.”

While Number 10 awaits full details of the latest US tariffs and their potential impact on the UK, a government spokesperson said: “Our film industry employs millions of people, generates billions for our economy and showcases British culture globally. We are absolutely committed to ensuring it continues to thrive and create good jobs right across the country.”

Listen below to Trump100 from May where we discuss Trump’s tariff threat:

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The madness of trying to second-guess what the president might mean becomes all too apparent at an event like this year’s London Film Festival.

Mr Wardle explains: “There are films in this festival that were made in Britain and in the US, made physically in terms of the shoot in London, post-produced in Canada, with VFX done in India…. how do you apply tariffs? At what point do you do that?”

Read more:
Hollywood is dying – but insiders fear Trump’s tariff threat may hasten demise
Trump plan for tariff on non-US movies could deal knock-out blow, union says

On the red carpet, actor Charles Dance – who stars in Guillermo del Toro’s Frankenstein – questioned Trump’s knowledge of filmmaking.

“I don’t think he is generally known for his own understanding of culture,” he said, “this is a man who wants to concrete over the Rose Garden.”

Rian Johnson, director of the Knives Out franchise, said it was “dark times right now in the States, for a lot of reasons”.

“All we can do is keep making movies we believe in, that matter, that say things to audiences… I think we need more of that so we’ll keep forging ahead as long as we’re able,” he said.

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Volodymyr Zelenskyy believes ‘Putin is afraid’ that Donald Trump could still supply Ukraine with Tomahawk missiles

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Volodymyr Zelenskyy believes 'Putin is afraid' that Donald Trump could still supply Ukraine with Tomahawk missiles

Volodymyr Zelenskyy has not ruled out the possibility that he can secure long-range Tomahawk missiles from the US, adding that he believes “Putin is afraid” of the consequences.

In an exclusive interview with NBC News’s Meet the Press, Ukraine’s president discussed some of the details of his two-hour meeting with Donald Trump on Friday, including his desire for the weapons after three years of war with Russia.

“It’s good that President Trump didn’t say ‘no’, but for today, didn’t say ‘yes’,” he said about the supply of the missiles, as part of a discussion which will air on Sunday.

Ukraine war latest: Zelenskyy proposes ‘drone for Tomahawk’

He admitted the US president was concerned about a potential escalation with Russia, but Mr Zelenskyy told NBC, Sky News’s US partner, that the weapons are a genuine concern for Vladimir Putin.

“I think that Putin [is] afraid that United States will deliver us Tomahawks. And I think that he [is] really afraid that we will use them,” he said.

Volodymyr Zelenskyy still hopes the US will supply Tomahawks. Pic: Meet the Press/NBC News
Image:
Volodymyr Zelenskyy still hopes the US will supply Tomahawks. Pic: Meet the Press/NBC News

The weapons have a significantly longer range than any other missiles in Ukraine’s armoury and have the potential to be a game-changer in the war against Russia.

More on Russia

While Mr Trump did not rule out providing the Tomahawk missiles, he appeared cool to the prospect as he looked ahead to a meeting with the Russian president in Hungary in the coming weeks.

‘US doesn’t want escalation’

Following the meeting with Mr Trump, who held a phone call with Mr Putin on Thursday, Mr Zelenskyy told reporters: “We spoke about long-range (missiles) of course. And I do not want to make statements about it.”

But he added: “We don’t speak about it because… United States doesn’t want this escalation”.

Volodymyr Zelenskyy's plans to secure new missiles had worried Russia. Pic: Reuters
Image:
Volodymyr Zelenskyy’s plans to secure new missiles had worried Russia. Pic: Reuters

Later in a post on X, Mr Zelenskyy said he was counting on President Trump to “bring this war closer to an end”.

“We discussed all key issues – our positions on the battlefield, long-range capabilities and air defence, and, of course, diplomatic prospects,” he said.

“Russia must end the aggression it started and continues to deliberately prolong. We count on the United States’ pressure.”

In a roundtable with journalists following the meeting, Mr Trump confirmed that hitting targets deep inside Russian territory would be an “escalation”.

Donald Trump said hitting targets deep inside Russian territory would be an 'escalation'. Pic: Reuters
Image:
Donald Trump said hitting targets deep inside Russian territory would be an ‘escalation’. Pic: Reuters

He also said he was hesitant to tap into the US’ supply of Tomahawks, saying: “I have an obligation also to make sure that we’re completely stocked up as a country, because you never know what’s going to happen in war and peace.

“We’d much rather have them not need Tomahawks. We’d much rather have the war be over to be honest.”

Analysis: Is Trump being ‘played’ by Putin?

Before Donald Trump met with Volodymyr Zelenskyy, he hosted one of his favourite singers, Andrea Bocelli, in the Oval Office.

The Italian tenor serenaded him with the signature track Time To Say Goodbye, a song about hope and new beginnings.

But the next event on his agenda suggested antipathy between Trump and the Ukrainian president are firmly lodged in the past.

On the key issue of whether Vladimir Putin actually wants peace, the pair continue to fundamentally disagree.

Trump repeated several times his belief that Putin is committed to ending the war, which may come as a surprise to the people of eastern Ukraine, being pummeled by an expanded Russian offensive in the past few months.

Trump also spoke about “bad blood on both sides”, again inferring equal blame on Zelenskyy, whose sovereign nation was invaded, and Putin, who is doing the invading.

It’s in Putin’s gift to stop the fighting immediately, but that was glossed over.

Read more from Martha .

At Mr Trump and Mr Putin’s last meeting in Alaska in August, there were hopes that the conflict may finally be coming to an end.

But the US president was unable to pressure the Russian leader into accepting a ceasefire or a one-on-one meeting with Mr Zelenskyy.

Read more from Sky News:
Putin’s challenge ahead of summit
Was Putin forced back to talks?
Listen: Trump-Putin – Friends reunited?

Following Friday’s meeting at the White House, UK Prime Minister Sir Keir Starmer confirmed he had called Mr Zelenskyy to reiterate his support.

Ukraine has UK’s ‘resolute support’

A Downing Street spokesperson said: “The prime minister spoke to the president of Ukraine, European leaders and the NATO secretary general this evening following President Zelenskyy’s visit to the White House today.

“The leaders reiterated their unwavering commitment to Ukraine in the face of ongoing Russian aggression. A just and lasting peace for Ukraine was the only way to stop the killing for good, they agreed.

“Further discussions about how they could support Ukraine in the lead up to, and following, a ceasefire would continue this week, including in a Coalition of the Willing call on Friday, the leaders agreed.

“Following the call with world leaders this evening, the prime minister then spoke to President Zelenskyy bilaterally to underscore the United Kingdom’s resolute support for Ukraine.”

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Donald Trump admits it’s possible he’s being ‘played’ by Vladimir Putin over Ukraine

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Donald Trump admits it's possible he's being 'played' by Vladimir Putin over Ukraine

Before Donald Trump met with Volodymyr Zelenskyy, he hosted one of his favourite singers, Andrea Bocelli, in the Oval Office.

The Italian tenor serenaded him with the signature track Time To Say Goodbye, a song about hope and new beginnings.

But the next event on his agenda suggested antipathy between Trump and the Ukrainian president are firmly lodged in the past.

On the key issue of whether Vladimir Putin actually wants peace, the pair continue to fundamentally disagree.

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What happened at the Trump-Zelenskyy meeting?

Trump repeated several times his belief that Putin is committed to ending the war, which may come as a surprise to the people of eastern Ukraine, being pummeled by an expanded Russian offensive in the past few months.

Trump also spoke about “bad blood on both sides”, again inferring equal blame on Zelenskyy, whose sovereign nation was invaded, and Putin, who is doing the invading.

It’s in Putin’s gift to stop the fighting immediately, but that was glossed over.

More on Donald Trump

Zelenskyy, clearly contorted by a need to put the record straight but not anger the famously mercurial man on the other side of the table, fired back that it is the Ukrainians who are committed to a ceasefire, a trilateral meeting and ultimately, an end to this war.

Ukraine war: Zelenskyy proposes ‘drone for Tomahawk’ deal

Relations between Zelenskyy and Trump have, obviously, improved from February when the Ukrainian president was berated and left the White House early.

On that occasion, he was mocked for wearing a T-shirt and so, the next two visits, he has sported an all black suit. He has also learned that Trump responds to flattery and, accordingly, he peppered the president with compliments.

Zelenskyy, pictured following his meeting with Trump, has learned that the president responds to flattery. Pic: AP
Image:
Zelenskyy, pictured following his meeting with Trump, has learned that the president responds to flattery. Pic: AP

He credited him with “managing the ceasefire in the Middle East”, and said he believes he has a “chance” to do the same in Ukraine.

Trump came into the meeting buoyed by the diplomatic success of the past fortnight in the Middle East, intoxicated by the praise he has received from all sides for brokering the hostage deal. But the war, he said he could solve in 24 hours, is proving a tougher nut to crack, and he’s growing frustrated with everyone involved.

That much could be gleaned from his Truth Social post after the meeting, which implored Putin and Zelenskyy to end the war along its current lines. “Let both claim Victory, let History decide!” he wrote.

Read more from Sky News:
Zelenskyy on US ‘long-range’ weapons
Putin faces difficult trip to summit
Trump’s ‘game of diplomatic chess’

It was a marked shift from less than a month ago, when Trump, at that point more angered by Putin, suggested Ukraine could potentially win back all its territory.

As recently as Sunday, he was threatening to send long-range Tomahawk missiles to Ukraine but he made clear after their meeting that he wouldn’t be doing that right now. It’s likely he will wait until at least after his trailed meeting with Putin in Budapest.

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I was in Alaska in August when Trump hosted Putin and laid out the literal and metaphorical red carpet for him.

The US president went in with two aims: to broker a ceasefire and a one-on-one meeting between Putin and Zelenskyy. He left with neither and there is no public sign that Putin has shifted from his maximalist aims in Ukraine.

Trump greets Putin on the red carpet in Alaska in August. Pic: AP
Image:
Trump greets Putin on the red carpet in Alaska in August. Pic: AP

Even by Trump’s own measurement, the summit was a failure.

Yet he seems determined to take the Russian president at his word, granting him first a phone call ahead of the Zelenskyy visit to Washington DC and now another meeting.

Putin was first successful in getting Trump to hold off on more severe sanctions on Russia, which were crippling economically. Now he has, seemingly, played a role in persuading Trump to hold off on sending Tomahawk missiles to Ukraine.

The US president was asked by a journalist whether it was possible he was being played by Putin. He admitted it was possible but said he usually comes out of these things pretty well. Time will tell.

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