Global Markets Edge Up as Sweeping Trump Tariffs Take Effect
By Dow Jones Newswires StaffMarket reaction overall was muted early on Thursday after President Trump's so-called reciprocal tariffs on scores of nations came into effect. As investors digested what has been described as the "pay-to-play" model of access to the U.S.'s domestic market, where investments there can carve out exemptions to the levies, trading partners were still seeking deals. The Swiss president was in Washington on Wednesday seeking to head off a 39% levy for her country; Trump announced a roughly 100% tariff on semiconductors but with tech companies exempt if they invest in the U.S., and he slapped an additional 25% tariff on imports from India.Global stock markets and U.S. stock futures were up early in Europe, the dollar fell and Treasury yields rose. Gold futures rose to their highest level since mid June.U.S. stock futures for the S&P 500 and Nasdaq were last up around 0.3% and futures for the Dow Jones Industrial Average climbed 0.1%. In Europe, the pan-European Stoxx Europe 600 gained 0.2%, reflecting modest gains across all the major national stock markets. The FTSE 100, however, lost 0.3% ahead of a likely rate cut from the Bank of England.Stock markets in Asia closed higher, with technology-related stocks leading the gains after Trump said companies that have committed investment in the U.S. would be exempt from 100% tariffs. Taiwan Semiconductor Manufacturing Co. said earlier this year it plans to invest at least $100 billion more in chip-manufacturing plants in the U.S. Still, European chip makers were trading lower than the overall market.The dollar fell to a 10-day low against a basket of currencies as markets bet on more U.S. interest-rate cuts. Those bets were fuelled further by comments this week from Fed policymakers Neel Kashkari and Mary Daly hinting about imminent rate cuts. The DXY dollar index hit an intraday low of 98.097.The Swiss franc was steady but remained weak; "While we still believe that a deal will ultimately be reached, it is likely to be far more expensive than Switzerland had hoped," Commerzbank's Michael Pfister said. The euro was recently flat at 0.9396 francs, having reached a high of 0.9407 francs on Wednesday.Bitcoin edged lower, down 0.3% to $114,837, LSEG data show.Weak demand at the U.S. Treasury's 10-year note auction on Wednesday caused the Treasury yield curve to steepen as focus turns to Thursday's $25 billion auction of 30-year bonds. The two-year Treasury yield was recently up 1.5 basis points to 3.715%; the 10-year yield rose 1.8 basis points and the 30-year Treasury yield was up 1.9 basis points, according to Tradeweb.Gilt yields rose slightly ahead of a Bank of England interest-rate decision due at 1100 GMT, with a 25 basis-points rate cut widely anticipated, leaving the focus on the BOE's new forecasts. The 10-year gilt yield was up 1 basis point to 4.526%, Tradeweb data showed.Gold was up at multi-month highs as trade tensions and policy uncertainty spurred demand. Futures were last up 1% at $3,467.10 a troy ounce, the highest level since mid-June.Oil prices were up, with Brent crude rising 0.8% to $67.41 a barrel and WTI up 0.8% to $64.90 a barrel. The benchmarks settled lower for the fifth straight session on Wednesday after the U.S. said it would double tariffs on India, pledging to target countries that buy Russian oil. Meanwhile, the latest oil demand signals were positive, with U.S. crude stockpiles dropping to their lowest level in two weeks and Saudi Aramco raising its selling price to Asia.Write to Barcelona Editors at [email protected]