Trump's 25% EU tariffs rattles European shares, Wall Street mixed

Major Wall Street indexes were mixed on Thursday as fresh US data hurt sentiment, and European stock markets fell following a threat from US President Donald Trump to impose 25 per cent tariffs on imports from the region.

Dampening some risk-taking, data showed jobless claims stood at 242,000, higher than estimates of 221,000. 

Oil prices climbed as supply concerns resurfaced. Trump revoked Chevron's license to operate in Venezuela. [O/R]

MSCI's gauge of stocks across the globe fell 0.23 per cent and the euro eased. Benchmark US Treasury yields rose after the US data.

 

The Dow Jones Industrial Average rose 359.46 points, or 0.83 per cent, to 43,792.58, the S&P 500 rose 4.48 points, or 0.08 per cent, to 5,960.54, while the Nasdaq Composite fell 88.14 points, or 0.46 per cent, to 18,987.12. 

Shares of Nvidia, which reported earnings late Wednesday, swung to losses as investors focused on signs of increased AI spending in the industry.

Trump created some confusion over the looming duties on top trading partners Canada and Mexico on Wednesday, by signalling they would take effect on April 2, which would be another month-long extension.

However, a White House official later said the previous March 4 deadline for the levies remained in effect "as of this moment", stirring further uncertainty about US trade policy.

Trump also floated a 25 per cent "reciprocal" tariff on European cars and other goods.

European stocks were weaker across the board, with the STOXX 600 index dragged by automaker and component maker shares in response to the potential tariffs. The technology index was also down.

"We're almost in a situation where there is so much news that it's leaving traders paralysed, because they don't know what to focus on, and particularly with Trump, what is a negotiating gambit and what is a serious policy proposal," said Michael Brown, senior research strategist at Pepperstone.

"Given the degree of uncertainty, it does make sense to lighten up on positioning, particularly in riskier assets."

The yield on benchmark US 10-year notes rose 3.8 basis points to 4.287 per cent, and the 2-year note yield, which typically moves in step with interest rate expectations for the Federal Reserve, rose 2.8 basis points to 4.1 per cent.

US growth jitters

The greenback, which has been under pressure in recent weeks, rose, with the dollar index, which measures the greenback against a basket of currencies including the yen and the euro, up 0.64 per cent.

Traders have raised bets for Federal Reserve interest rate cuts, now seeing two quarter-point reductions this year, with the first likely in July.

The Fed's preferred inflation gauge, the Personal Consumption Expenditure (PCE) index, is due on Friday.

"Markets are starting to feel less confidence about US growth," said Shoki Omori, chief global desk strategist at Mizuho Securities.

Nvidia shares were up about 1 per cent in pre-market trading, after slipping 1.5 per cent after the bell on Wednesday despite the heavyweight US chipmaker and artificial intelligence pioneer giving a strong growth forecast for the first quarter.

Cryptocurrency bitcoin gained 1.41 per cent to $85,647.82, following a nearly 12 per cent tumble over the first three days of this week.

Bitcoin bull Geoff Kendrick, global head of digital assets research at Standard Chartered, cautioned against buying the dip just yet in a note to clients.

"Stay patient," he said. "These types of losses rarely end well and I still think the big capitulation is yet to come."

Spot gold fell 1.41 per cent to $2,875.13 an ounce, pressured by a stronger US dollar and rising yields.