Stocks rise; dollar gets some support from tariff threats

By Sinéad Carew and Amanda Cooper

NEW YORK/LONDON (Reuters) -The U.S dollar rose against some currencies after U.S. President-elect Donald Trump pledged to impose new tariffs on imports from Canada, Mexico and China, while MSCI's global equity index was higher after the release of the Federal Reserve's latest meeting minutes.

The minutes from the meeting earlier this month showed officials divided over how much farther they may need to cut interest rates, but in agreement about avoiding concrete guidance.

"With the stock market, no surprises is good news. The market likes certainty above anything else," said Burns McKinney, portfolio manager at NFJ Investment Group in Dallas. "Overall, Fed policymakers are still supportive of a careful approach. ... They didn't say anything hawkish."

On Wall Street, at 3:11 p.m. (2011 GMT) the Dow Jones Industrial Average rose 82.93 points, or 0.19%, to 44,819.50; the S&P 500 rose 26.92 points, or 0.45%, to 6,014.29; and the Nasdaq Composite rose 86.47 points, or 0.45%, to 19,141.31.

By late afternoon MSCI's gauge of stock markets across the globe had also turned higher and was up 0.71 point, or 0.08%, to 858.46. Europe's STOXX 600 index earlier closed down 0.57%.

While it was below its session high the dollar was still up against the Mexican peso and Canadian dollar in afternoon trading.

Trump, citing concerns over illegal immigration and illicit drug trading, had said earlier that he would put a 25% tariff on products from Mexico and Canada, and an additional 10% tariff on goods from China. He had previously threatened to slap tariffs in excess of 60% on Chinese imports.

But investors toned down their initial reactions to the tariff threat and appeared to view it as a "negotiation tool," according to McKinney.

However, U.S. Treasury yields rose on Tuesday, as Monday's sharp bond rally lost momentum as the tariff announcement undid some of the investor optimism from Trump's selection late last week of Scott Bessent as Treasury secretary.

The yield on benchmark U.S. 10-year notes rose 4.3 basis points to 4.306%, from 4.263% late on Monday while the 30-year bond yield rose 3.6 basis points to 4.4828%.

The 2-year note yield, which typically moves in step with interest rate expectations, rose 0.6 basis point to 4.258%, from 4.252% late on Monday.

In currencies, the Mexican peso < MXN=> weakened 1.69% versus the dollar and the Canadian dollar weakened 0.55% versus the greenback.

While the euro was down 0.18% against the dollar at $1.0475, against the Japanese yen, the dollar weakened 0.73% to 153.08.

Oil prices settled lower, slightly extending Monday's losses in choppy trade after news of an agreement for a ceasefire between Israel and Lebanon, reducing oil's risk premium.

U.S. crude settled down 0.25% at $68.77 a barrel and Brent ended at $72.81 per barrel, down 0.27% on the day.

Bitcoin fell 2.06% to $91,758.00, adding to Monday's losses after last week hitting a record high at $99,830. The token had benefited from speculation of an easier regulatory environment for cryptocurrencies under Trump.



In precious metals, gold prices were caught in a tug-of-war, dipping to a week low as safe-haven demand softened with news of the ceasefire, while concern over Ukraine and Trump's tariff plans added some support.

Spot gold rose 0.18% to $2,629.86 an ounce while U.S. gold futures rose 0.34% to $2,625.60 an ounce.

Source: Investing.com