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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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World

‘Let’s do a deal’: Zelenskyy touts Ukraine’s rare earth stores to Trump

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'Let's do a deal': Zelenskyy touts Ukraine's rare earth stores to Trump

Volodymyr Zelenskyy has told Donald Trump “let’s do a deal” as he offered the US a partnership over Ukraine’s stores of rare earth and minerals.

Earlier this week, Mr Trump said he wanted Ukraine to supply the US with critical resources in exchange for financial support in its war with Russia.

In an interview with Reuters on Friday, Mr Zelenskyy said: “If we are talking about a deal, then let’s do a deal, we are only for it.”

While emphasising that Kyiv was not proposing “giving away” its resources, he said he was open to a mutually beneficial partnership to develop them jointly.

Ukraine-Russia war latest: Ukrainian forces seize land inside Russia

Rare earths are a group of 17 metals that are vital in the production of high-performance magnets, electric motors and consumer electronics.

Mr Zelenskyy touted the country’s reserves of titanium and uranium as Europe’s largest.

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According to the World Economic Forum, Ukraine also has the potential to become a key supplier of lithium, beryllium, manganese, gallium, zirconium, graphite, apatite, fluorite and nickel.

Showing a map of Ukraine’s mineral deposits, he then said Russia currently has control of less than 20% of the country’s mineral resources – but that includes about half its rare earth deposits.

Volodymyr Zelenskyy with the 'Plan of Victory' map. Pic: Reuters
Image:
Zelenskyy said Ukraine has Europe’s largest stores of titanium and uranium. Pic: Reuters

Putin is not just grabbing them [minerals] along with the land, he is already thinking about how to get other partners in his alliance – North Korea, Iran… and he will give them access,” Mr Zelenskyy said.

“This is very rich land. This does not mean that we are giving it away to anyone, even to strategic partners. We are talking about partnership…

“Let’s develop this together, make money, and most importantly, it’s about the security of the Western world.”

The Ukrainian president added that Kyiv and the White House were discussing the idea of using the country’s underground gas storage sites to store American liquefied natural gas, calling it “very interesting”.

He also said he would like to discuss the US having priority when it came to rebuilding Ukraine, saying it would amount to “a lot of money for business”.

‘Not accepting Russia’s ultimatums’

He also insisted that Mr Trump must meet with him before he meets with the Russian president, “otherwise it will look like a dialogue about Ukraine without Ukraine”.

He added: “I don’t know what compromises can be discussed at the negotiating table, we have not reached that point…

“It is important for people to understand that Ukraine is negotiating, not accepting ultimatums from Russia.”

He also stressed Ukraine’s need for security guarantees from its allies as part of any settlement.

It comes as Mr Trump said he may meet with Mr Zelenskyy in the White House as early as next week. The two last met in New York in September last year.

Mr Trump also repeated his interest in meeting the Russian president with whom he said he always had a “good relationship”.

Speaking to reporters while meeting with Japanese Prime Minister Shigeru Ishiba, Mr Trump said: “I’d like to see it end, just on a human basis. I’d like to see that end. It’s a ridiculous war.”

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Mr Zelenskyy also told Reuters in his interview that thousands of North Korean soldiers have now returned to fight Kyiv’s forces in the Kursk region of Russia.

A Ukrainian special forces commander told Sky News last month that it appeared that North Korean troops had been temporarily pulled back from the frontline after heavy losses.

The commander, who went by the codename “Puls,” claimed the forces had been seen blowing themselves up with grenades rather than risk capture.

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US

Judge pauses Donald Trump’s plan to put thousands of USAID workers on leave

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Judge pauses Donald Trump's plan to put thousands of USAID workers on leave

A federal court has paused aspects of a plan by Donald Trump to dismantle the US Agency for International Development (USAID) and put roughly 2,700 of its staff on leave.

District judge Carl Nichols, who was nominated by the US president during his first term, agreed with legal arguments from the largest government workers’ union and an association of foreign service workers.

They sued to stop Mr Trump’s administration attempting to close USAID, which distributes billions of dollars of humanitarian aid around the world.

Justice department official Brett Shumate told Judge Nichols that about 2,200 USAID employees would be put on paid leave under the administration’s plans.

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What is USAID?

“The president has decided there is corruption and fraud at USAID,” said Mr Shumate.

It echoes comments President Trump made on Friday in a post on Truth Social accusing USAID – without evidence – of corruption and spending money fraudulently.

But Karla Gilbride, a lawyer for the unions, argued the plans were unlawful: “The major reduction in force, as well as the closure of offices, the forced relocation of these individuals were all done in excess of the executive’s authority in violation of the separation of powers.”

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Judge Nichols’s order, which is in effect until 14 February, blocks Mr Trump’s administration from implementing plans to place the 2,200 USAID workers on paid leave from Saturday.

It also reinstates some 500 employees who had already been furloughed.

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And there will be a ban on relocating USAID humanitarian workers stationed outside the US, after overseas staff were ordered to return home within 30 days.

Judge Nichols will consider a request for a longer-term pause at a hearing scheduled for next week.

But he rejected other requests from the unions to reopen USAID buildings and restore funding for agency grants and contracts.

Soon after being inaugurated, Mr Trump ordered all US foreign aid be paused to ensure it is aligned with his “America First” policy.

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The dismantling of USAID has largely been overseen by Elon Musk, who is spearheading the president’s effort to cut costs and bureaucracy.

US secretary of state Marco Rubio insists the government will continue providing foreign aid, “but it is going to be foreign aid that makes sense and is aligned with our national interest”.

Friday’s ruling is the latest setback in the courts for the Trump administration.

Judges have temporarily paused other controversial policies, including one offering financial incentives for federal workers to resign and another ending American citizenship for anyone born in the US if their parents are in the country illegally.

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Science

1.4 Million-Year-Old Jaw Identified as New Paranthropus Species in South Africa

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1.4 Million-Year-Old Jaw Identified as New Paranthropus Species in South Africa

A fossilised jawbone discovered in South Africa has been classified as belonging to a previously unidentified human relative. The specimen, estimated to be 1.4 million years old, has been attributed to the genus Paranthropus, known for its distinctive dental structure. Unlike its robust counterparts, the newly identified species exhibits a smaller jaw and teeth, suggesting dietary differences. The findings indicate that multiple hominin species coexisted in southern Africa during that period, adding to the complexity of early human evolution.

Findings from the Research

According to a study published in the Journal of Human Evolution, the fossil jaw, catalogued as SK 15, was unearthed in 1949 at Swartkrans, a well-known paleoanthropological site in South Africa. Originally classified as Telanthropus capensis and later reassigned to Homo ergaster, recent analysis has challenged this classification. Clément Zanolli, a paleoanthropologist at the University of Bordeaux, told Live Science that advanced X-ray imaging was used to create virtual 3D models of the specimen. Internal and external dental structures were examined, revealing that SK 15 does not align with Homo species. The molars were found to be longer and more rectangular than those typically seen in Homo, with the jaw notably thicker than expected. These characteristics led researchers to identify it as a distinct species within the Paranthropus genus, named Paranthropus capensis.

Implications of the Discovery

As per the findings, Paranthropus capensis existed alongside Paranthropus robustus around 1.4 million years ago. Variations in jaw and tooth structure suggest different dietary habits, with P. robustus likely relying on a highly specialised diet due to its large molars, while P. capensis may have consumed a broader range of food sources.

Zanolli noted that the fossil record in Africa remains incomplete, leaving open the question of whether P. capensis persisted beyond its currently known timeframe. The possibility of additional unidentified species in the hominin lineage has been highlighted, underlining the need for further excavation and study in the region.

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