Wall Street closes sharply lower as US Federal Reserve chair warns tariffs could lead to slower growth, higher inflation.

United States President Donald Trump has touted “big progress” in trade talks with Japan after making an unexpected intervention in the negotiations, as uncertainty caused by his sweeping tariffs continues to roil stock markets.

Trump made his comments on Wednesday after making the surprise decision to sit in on negotiations between his administration and Japanese officials in Washington, DC.

“A Great Honor to have just met with the Japanese Delegation on Trade. Big Progress!” Trump wrote on Truth Social after the talks, which included US Treasury Secretary Scott Bessent, US Commerce Secretary Howard Lutnick and Economic Revitalization Minister Ryosei Akazawa.

Akazawa said after the meeting that Trump wanted to reach a deal before the end of his 90-day pause on his “reciprocal” tariffs, with the Japanese hoping to see the agreement sealed “as soon as possible.”

Japanese Prime Minister Shigeru Ishiba said the negotiations would not be easy, but the initial rounds of talks had “created a foundation for the next steps”.

Like dozens of other US trade partners, Japan has been hit with a 10 percent baseline tariff in addition to duties of 25 percent on cars, steel and aluminium, which rank among the East Asian country’s top exports.

Japan, a top US security ally and its fourth-largest trade partner, is also facing a targeted 24 percent “reciprocal” tariff under Trump’s “liberation day” trade measures, nearly all of which have been paused until July 9.

“Japan’s industry is so closely integrated in the US economy that everyone is very concerned about the trade talks,” Martin Schulz, chief policy economist at Fujitsu in Tokyo, told Al Jazeera.

“Although there cannot be winners in a trade war, we are also quite optimistic that agreeable results can be achieved. Japan is the largest investor in the US and interested in investing more.”

“If both economies can be kept on a growth track, higher imports from the US become possible,” Schulz added.

The US-Japanese talks came as Wall Street racked up further heavy losses amid continuing uncertainty over Trump’s trade salvoes.

The benchmark S&P 500 closed 2.24 percent lower on Wednesday, while the tech-heavy Nasdaq Composite fell 3.07 percent.

The losses followed a warning by US Federal Reserve Chair Jerome Powell that Trump’s steep tariffs could leave the US economy grappling with weak growth, rising unemployment and higher inflation all at once.

“We may find ourselves in the challenging scenario in which our dual-mandate goals are in tension,” Powell said in a speech to the Economic Club of Chicago on Wednesday, referring to the US central bank’s twin goals of maximum employment and stable prices.

“If that were to occur, we would consider how far the economy is from each goal, and the potentially different time horizons over which those respective gaps would be anticipated to close.”

US stocks have been on a rollercoaster ride since Trump’s inauguration in January, alternating between sharp dips and big jumps amid his back-and-forth tariff announcements.

Financial markets and businesses have been on tenterhooks waiting for signs that the US president is open to watering down or scrapping many of his tariffs in exchange for concessions from US trading partners.

Trump administration officials have said that more than 75 countries have reached out to begin negotiations on trade.

After the latest losses on Wall Street, the S&P 500 and Nasdaq are down about 10 percent and 15 percent, respectively, since the start of the year.

Asian stock markets got off to a better start on Thursday, with Japan’s benchmark Nikkei 225, South Korea’s KOSPI and Hong Kong’s Hang Seng Index each rising more than 0.5 percent in early trading.

WASHINGTON (AP) — President Donald Trump said he’s joining some of his top economic advisers on Wednesday for negotiations at the White House over tariffs and trade with a top Japanese official who is traveling to Washington for the talks.

The Republican president said in a post on his social media platform that he’ll attend the meeting alongside Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick, top economic advisers with a central role in his trade and tariff policies.

Trump recently announced a round of global tariffs but then quickly put them on hold for 90 days after the markets tanked.

The move put Japan’s 24% across-the-board tariff on hold, but a 10% baseline tariff and a 25% tariff on cars, auto parts, steel and aluminum exports to the U.S. remain in place.

“Japan is coming in today to negotiate Tariffs, the cost of military support, and ‘TRADE FAIRNESS.’ I will attend the meeting, along with Treasury & Commerce Secretaries,” Trump wrote in the social media post. “Hopefully something can be worked out which is good (GREAT!) for Japan and the USA!”

Japan’s chief trade negotiator, Economic Revitalization Minister Ryosei Akazawa, was headed to Washington on a mission to convince U.S. officials to remove Trump’s tariff measures against the East Asian ally of the United States.

Akazawa is to hold his first talks with Bessent and U.S. Trade Representative Jamieson Greer through Friday.

“I am prepared for the talks,” Akazawa told reporters at Tokyo’s Haneda Airport before boarding his flight to Washington. “I will negotiate in order to firmly protect our national interest.”

He said that both Bessent and Greer are “known to be pro-Japan and professionally talented” and that he hopes to build a relationship of trust with them. “I believe we can have good talks toward a win-win relationship that will serve national interest for both Japan and the United States,” he said.

Japan is among the first countries to start negotiations with the U.S.

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Yamaguchi reported from Tokyo.

Authorities in the Eastern Cape Province of South Africa rescued a kidnapped American pastor during a deadly shootout on Tuesday at a house in KwaMagxaki, Gqeberha.

The Directorate for Priority Crime Investigation (HAWKS) released a statement announcing that an operation led by the agency “resulted in the successful rescue” of an American pastor who was kidnapped.

Though the news release did not name the pastor, 34-year-old Josh Sullivan, of Tennessee, was kidnapped by several armed, masked men last week at his church in the Eastern Cape, Fellowship Baptist Church Motherwell.

AMERICAN PASTOR’S KIDNAPPING IN SOUTH AFRICA FUELED BY SOARING ARMED ROBBERY INCIDENTS IN RECENT YEARS

Police said they received tips that Sullivan was inside a safe house in KwaMagxaki, Gqeberha. 

When they arrived at the home, suspects inside a car on the premises began firing at law enforcement and attempted to flee.

A “high-intensity shootout” took place and three unidentified suspects were killed. 

Sullivan was found inside the same car that the suspects were in, but he was “miraculously unharmed,” police said, adding that he is “currently in an excellent condition.”

‘SLOWING THINGS DOWN’ IS ‘KEY’ TO SAFE RETURN OF TENNESSEE PASTOR KIDNAPPED IN SOUTH AFRICA: RETIRED FBI AGENT

Josh Sullivan is from Maryville, Tennessee, and spent years observing the leadership of Fellowship Baptist Church Pastor Tom Hatley, according to congregation members on Facebook. (Facebook)

Tom Hatley, pastor of Fellowship Baptist Church in Maryville, Tennessee, confirmed Sullivan’s rescue early Wednesday morning in a Facebook post.

“Josh has been released. I just got ‘the go ahead to let it be known’. SA media has started broadcasting. American media will follow. Thank you for your support and prayers. Please do not stop praying for The Sullivans. Praise The Lord Jesus Christ!” he wrote.

Sullivan is from Maryville and spent years learning how to be a pastor under Hatley’s leadership, according to congregation members on Facebook.

Sullivan went to South Africa with his wife and two children in 2018 after the couple participated in a six-month internship there in 2015 as part of their Bible training to become missionaries.

Josh Sullivan, an American pastor from Tennessee, has been working as a missionary in South Africa with his wife and their children since 2018. (Fellowship Baptist Church Motherwell/Facebook)

“It was during this time that the Lord began to stir their hearts specifically for the Xhosa people,” fellow Missionary Mark Coffey said. “They returned in 2018 as full-time church-planting missionaries, determined to share the Gospel and see lives changed. Josh committed himself to two years of language school and became fluent in Xhosa so he could preach, disciple, and minister more effectively.”

This is a breaking news story. Check back for updates.