Stocks stall, dollar dips as investors assess Trump tariff pledge

By Medha Singh and Kevin Buckland

(Reuters) -Global stocks paused and the dollar slipped on Wednesday as concerns over the potential impact of U.S. tariffs when Donald Trump returns to the White House prompted traders to take some profits off the table before the month ends.

The safe-haven Japanese yen extended its strong run, climbing to a five-week high on the U.S. dollar, which was in turn weighed down by sagging Treasury yields.

Trading across markets is thinner than usual this week, with November trading drawing to a close before the U.S. Thanksgiving holiday on Thursday and many investors extending their break into Friday.

Futures pointed to a slightly lower start for the S&P 500 before a key consumer spending report, while the pan-European STOXX 600 lost 0.4%.

MSCI's broadest index of Asia-Pacific shares recouped slight, early losses to edge 0.1% higher. Earlier, Asian stocks lost their footing on fears over Trump's tariff pledges, with equities in Japan, Taiwan and South Korea leading losses.

Trump said late on Monday that he would immediately put a 25% tariff on all products from Mexico and Canada when he takes office in January, and impose an additional 10% tariff on goods from China. The threat drew warnings of retaliation.

Trump also chose trade lawyer Jamieson Greer as his new U.S. trade representative, a veteran of his first-term trade war against China.

But U.S. bond markets this week have taken heart over his nomination of Scott Bessent to be U.S. Treasury secretary, which has spurred hopes of reining in the government debt load.

"We're trying to get our heads around very volatile communication where on the one hand you have very aggressive and uncompromising news on tariffs but on the other hand a pretty pragmatic pick for Treasury secretary," said Samy Chaar, chief economist at Lombard Odier.

Trump's policies are "relatively positive for U.S. business conditions but probably more challenging for the rest of the world that will have to adjust and find a path to avoid disruptions and more expensive access to U.S. markets," Chaar said.

U.S. data at 1500 GMT is expected to show core U.S. inflation increased 2.8% in October. The U.S. central bank tracks the PCE price measures for its 2% inflation target.

"We think inflation is getting closer to target but it will remain slightly above. The Fed will continue to cut rates but at a slightly slower pace in an economic environment which is of a higher octane," said Chaar.

The U.S. dollar dropped against other major rivals, falling 0.6% to $1.0547 per euro and easing by a similar measure to $1.26446 against sterling. It slid 1.1% to 151.390 yen.

The New Zealand dollar rebounded 0.9% to $0.5887 from multi-month lows after the country's central bank opted to cut interest rates by 50 basis points on Wednesday, disappointing some in the market who had bet on a bigger reduction.

The largest cryptocurrency bitcoin attempted to find its feet after a four-day retreat from a record high of $99,830. It was last up 2.5% at $93,889.

Gold ticked up 0.8% to about $2,648 per ounce. [GOL/]

Oil prices held steady on Wednesday as markets evaluated a ceasefire agreement between Israel and Hezbollah while also anticipating Sunday's OPEC+ meeting, where the group could delay a planned increase in oil output. [O/R]



Brent crude futures rose 0.52%, to $73.19 a barrel and U.S. West Texas Intermediate crude was up 0.57%, at $69.16.

Both benchmarks settled lower on Tuesday over the Israel-Hezbollah ceasefire deal.

Source: Investing.com