Global Stocks Pause as Investors Worry About Next Target for U.S. Tariffs
Global stocks paused on Wednesday, with investors concerned about the next potential target for U.S. tariffs under President-elect Donald Trump. Currencies were mixed, with the safe-haven Japanese yen extending its strong run and climbing to a three-week high against the U.S. dollar. MSCI’s broadest index of Asia-Pacific shares edged 0.1% higher, while the pan-European index lost 0.4%.
The move came a day after Trump pledged new levies on Canada, Mexico, and China. He also said he would immediately put a 25% tariff on all products from Mexico and Canada upon taking office in January, and slap an additional 10% tariff on goods from China.
Stocks in Asia and Europe had initially declined, with losses led by Japan, Taiwan, and South Korea. However, stocks in China and Hong Kong rebounded from recent lows on bets that Beijing will roll out more supportive policies to counter risks of U.S. tariffs and shore up the sluggish Chinese economy.
The U.S. dollar was weighed down by sagging Treasury yields and fell against other major rivals. The euro edged back towards the previous session’s four-month trough, while the sterling slipped to a two-month low against the dollar.
Investors seem to be taking some risk off the table as trading in November draws to close ahead of the U.S. Thanksgiving holiday. The dollar has also been influenced by a reading on a key inflation gauge, the PCE deflator, due later on Wednesday.
Meanwhile, oil prices stabilized as markets assessed the potential impact of a ceasefire deal between Israel and Hezbollah. Futures for Brent crude and U.S. West Texas Intermediate crude were up slightly, as traders assessed the impact of the deal on global supply and demand.
