United States stock markets wobbled, and gold reached fresh highs on Tuesday as traders kept a nervous eye on US President Donald Trump’s next tariff decisions, worried about inflation and interest rates.
European markets rose, with both Frankfurt and London again setting records, while Asian equity markets struggled for direction.
Trump has followed through on his campaign pledges to resume his hardball trade diplomacy, signing off on steel and aluminum tariffs and warning of more measures to come.
While these measures have unsettled sentiment, equities have largely remained resilient since Trump took office, with analysts saying that measures have so far been less severe than feared.
Still, caution prevails on trading floors as dealers brace for the next announcement out of the White House.
For tariffs to be effective, “the administration needs to keep everyone guessing, and this creates uncertainty for financial markets,” noted AJ Bell’s Investment Director Russ Mould.
“The administration is clearly prepared to implement tariffs rather than just using them as a negotiating tactic,” he added.
The uncertainty fueled by Trump’s moves has pushed safe-haven gold ever higher. It extended its gains on Tuesday, hitting a new peak above $2,942 an ounce before retreating.
Fears that Trump’s tariffs, along with tax cuts and deregulation, will reignite inflation and force the Federal Reserve to keep interest rates elevated have sent the dollar up against most of its peers, although it traded mixed on Tuesday.
Investors are looking to readings of consumer and producer price indexes this week to provide a fresh snapshot of inflation.
US Federal Reserve boss Jerome Powell made the first of two appearances before lawmakers this week.
US stocks “halted their losses after Fed President Jerome Powell’s speech in which he stated that the central bank is in no hurry to adjust policy as the US economy remains strong overall,” said IG analyst Axel Rudolph.
Investors expect two cuts at most this year.
Focus also remained on the latest company earnings season, which was nearing its end.
Shares in Britain’s BP slid after it pledged to “fundamentally reset” its strategy in the face of tumbling profits.
The loss came despite rising oil prices.
“Signs of tighter Russian supply in addition to increasing supply risks provoked a fourth straight day of gains,” said IG’s Rudolph.
New York – Dow Jones: UP less than 0.1% at 44,494.72 points
New York – S&P 500: DOWN less than 0.1% at 6,063.66
New York – Nasdaq Composite: DOWN 0.2% at 19,682.91
London – FTSE 100: UP 0.1% at 8,777.39 (close)
Paris – CAC 40: UP 0.3% at 8,028.90 (close)
Frankfurt – DAX: UP 0.6% at 22,037.83 (close)
Hong Kong – Hang Seng Index: DOWN 1.1% at 21,294.86 (close)
Shanghai Composite: DOWN 0.1% at 3,318.06 (close)
Tokyo – Nikkei 225: Closed for a holiday
Euro/dollar: UP at $1.0351 from $1.0308 on Monday
Pound/dollar: UP at $1.2422 from $1.2364
Dollar/yen: UP at 152.28 yen from 151.97 yen
Euro/pound: DOWN at 83.32 pence from 83.35 pence
West Texas Intermediate: UP 1.3% at $73.22 per barrel
Brent North Sea Crude: UP 1.3% at $76.87 per barrel
With AFP
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