US markets faced a wave of significant developments on Tuesday, spanning manufacturing data, corporate restructuring, and trade policy.
Here are the important US headlines of the day:
Manufacturing activity contracts again in August
US manufacturing activity contracted for the sixth consecutive month in August, underscoring ongoing challenges for factories facing import tariffs and weak demand.
According to the Institute for Supply Management (ISM), the manufacturing Purchasing Managers’ Index (PMI) inched up to 48.7 from 48.0 in July.
While the reading remains below the 50 threshold that signals contraction, the data suggested a slight moderation in the pace of decline.
Economists surveyed by Reuters had projected a PMI of 49.0, highlighting the weaker-than-expected recovery. Manufacturing currently represents 10.2% of the US economy.
Kraft Heinz to split into two companies
Packaged foods giant Kraft Heinz announced plans to split into two separate publicly traded companies, nearly a decade after its $45 billion merger.
The move aims to streamline operations and address persistent underperformance in recent years.
One division will focus on sauces, spreads, and seasonings under brands such as Heinz, Philadelphia, and Kraft Mac & Cheese, generating about $15.4 billion in sales in 2024. The other company, tentatively named North American Grocery Co, will oversee grocery staples such as Oscar Mayer and Kraft Singles, with $10.4 billion in annual sales.
Warren Buffett, whose Berkshire Hathaway holds a 27.5% stake in Kraft Heinz, expressed disappointment with the decision to split the company.
“You don’t fix a mistake by making another one,” he suggested, framing the move as reactive rather than a strategic turnaround. Kraft Heinz shares have fallen nearly 15% from their year-to-date high, and the stock slumped 6% lower following Tuesday’s announcement.
Klarna revives IPO plans in New York
Swedish fintech giant Klarna Group Plc revived plans for a New York initial public offering, seeking to raise as much as $1.27 billion.
The company intends to sell 34.3 million shares at $35 to $37 each, targeting a valuation of roughly $14 billion.
The IPO follows a previously postponed attempt earlier this year due to market volatility.
Klarna, best known for its buy now, pay later (BNPL) services, had seen its valuation peak at $46.5 billion during the pandemic before settling at current levels.
With 111 million active users across 26 countries, Klarna aims to position itself as more than a lender by expanding into lifestyle services alongside its retail partners.
Trump seeks Supreme Court review on tariffs
President Donald Trump said his administration will seek an expedited Supreme Court ruling to overturn a federal appeals court decision that many of his tariffs were unlawfully imposed.
Trump argued that removing the tariffs would be “a devastation” for the country, while judges have allowed the levies to remain in place pending further litigation.
The president’s remarks come after the US Court of Appeals for the Federal Circuit ruled Friday that Trump wrongly used an emergency law to impose reciprocal tariffs on trading partners, as well as tariffs on China, Canada, and Mexico, citing fentanyl trafficking.
US stocks decline as yields climb
US equities traded lower on Tuesday, weighed by renewed tariff uncertainty and rising bond yields.
The Dow Jones Industrial Average fell 249.07 points, or 0.55%, while the S&P 500 dropped 0.69% and the Nasdaq Composite slid 0.82%.
The declines marked the tech-heavy Nasdaq’s first consecutive 1% drop since April, with major technology stocks such as Nvidia, Amazon, and Apple retreating.
Treasury yields also surged, with the 10-year note climbing to 4.27% and the 30-year yield topping 4.97%.
Bond Investors were concerned that the appeals court decision to overturn tariffs could lead to the US government paying back the revenue they collected through tariffs, which would worsen the government’s funding pressures.
The post US digest: Trump to expedite tariff appeal, Kraft Heinz split, US manufacturing slump appeared first on Invezz