All three main US indices extend gains
US stock indices ended higher on Wednesday rebounding from earlier losses spurred by China’s plan to impose up to 25% retaliatory tariffs on US goods.. The S&P 500 rose 1.2% to 2645. The Dow Jones Industrial added 1% to 24264. The NASDAQ Composite gained 1.5% to 7042.
The dollar weakened: the live dollar index data show the ICE US Dollar index, a measure of the dollar’s strength against a basket of six rival currencies, slipped 0.1% to 90.09.
Stock indices futures indicate higher openings today.
The possibility of a start of full-scale US and China trade war unsettled global markets after China’s Ministry of Commerce said it plans to impose tariffs of up to 25% on 106 American products, including soybeans and airplanes, totaling $50 billion. The move came after the US laid out the list of $50 billion in tariffs against Chinese imports on Tuesday, targeting mostly industries China wants to develop.
Both governments have indicated willingness to negotiate though. The economic news were mixed: payrolls processing firm ADP estimated that the private sector created 241,000 jobs in March, far more than expected. The Institute of Supply and Manufacturing reported its services index fell to 58.8% from 59.5% the previous month. A reading of at least 50 indicates expansion. And factory orders for February came in at below expected 1.2%.
Trade war concerns weigh on European stocks
European stocks extended losses on Wednesday on rising global trade war concerns. Both the euro and British pound rose against the dollar but turned lower today. The STOXX Europe 600 fell 0.5%. Germany’s DAX 30 lost 0.4% settling at 11957.90. France’s CAC 40 slid 0.2% and UK’s FTSE 100 slipped 0.1% to 7034.01.
Indices opened 1.2% - 1.6% higher today.
Economic data showed euro-zone inflation rose to 1.4% in March from 1.1% the previous month, the first pickup in prices in four months. The unemployment rate fell to 8.5% in February, its lowest level in more than nine years. In the UK business activity in the construction sector fell in March after five months of marginal growth: Markit’s purchasing managers index for the construction industry fell to 47.0 from 51.4 in February. A reading above 50 indicates expansion.
Asian indices mostly higher
Asian stocks are mostly rising today as US and Chinese officials indicated readiness to negotiate after laying out lists for reciprocal tariffs which can come into effect in a couple of months. Japan's Nikkei ended 1.6% higher at 21665 helped by continued yen pullback against the dollar. Markets in mainland China and Hong Kong are closed for holidays. Australia’s ASX All Ordinaries is up 0.5% as Australian dollar turned lower against the greenback.
Brent slips
Brent futures prices are retreating today. Prices ended lower yesterday despite a US supply draw: the US Energy Information Administration reported Wednesday that domestic crude supplies fell by 4.6 million barrels last week. June Brent crude slipped 0.2% to $68.02 a barrel on Wednesday.