By Greta Rosen Fondahn and Kevin Buckland
GDANSK/TOKYO (Reuters) – European stock markets slipped on Thursday following a threat from U.S. President Donald Trump to impose 25% tariffs on imports from the region, but equities globally held broadly steady after Nvidia’s results threw up no big surprises.
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 U.S. trade policy.
Trump also floated a 25% “reciprocal” tariff on European cars and other goods.
European stocks were weaker across the board, with the STOXX 600 index down 0.4%, while an index of automakers and component makers fell 3%. The technology index was down 0.9%.
The euro eased 0.1% but stayed within the past week’s range.
“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.”
U.S. Nasdaq futures rose 0.7%, while S&P 500 futures were up 0.6%. The U.S. dollar firmed and Treasury yields ticked higher.
U.S. two-year Treasury yields rose to 4.1065%, after a decline on Wednesday to their lowest since November 1 at 4.065%. The 10-year yield rose to 4.3058% from a low of 4.245% on Wednesday.
US GROWTH JITTERS
The dollar has been under pressure in recent weeks, while Treasury yields have fallen, as a run of soft economic indicators combine with growth worries arising from Trump’s tariff plans.
Traders have raised bets for Federal Reserve interest rate cuts, now seeing two quarter-point reductions this year, with the first likely in July.
Markets will look at U.S. GDP and durable goods orders data on Thursday for any stronger signs of slowdown, while the Fed’s preferred inflation gauge, the Personal Consumption Expenditure (PCE) index, is due on Friday.
“Markets are starting to feel less confidence about U.S. growth,” said Shoki Omori, chief global desk strategist at Mizuho Securities.
The U.S. dollar index, which measures the currency against six other majors, rose 0.17% to 106.63, extending a climb from a 2 1/2-month low hit earlier this week.
Nvidia shares were up about 1% in pre-market trading, after slipping 1.5% after the bell on Wednesday despite the heavyweight U.S. chipmaker and artificial intelligence pioneer giving a strong growth forecast for the first quarter.
Cryptocurrency bitcoin edged up to $86,462 following a nearly 12% 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.”
Safe-haven gold eased back to $2,888 per ounce, pressured by a stronger U.S. dollar and rising yields.
(Reporting by Kevin Buckland and Greta Rosen Fondahn; Editing by Susan Fenton, Kirsten Donovan)
