NEW YORK, March 13 — Stock markets mostly rose yesterday on both sides of the Atlantic as investors shrugged off Washington’s latest tariffs to focus on cooling US inflation and a Ukraine ceasefire plan.
Global markets have endured severe swings this month as US President Donald Trump looks to ramp up pressure on global partners by imposing or threatening hefty duties on their goods, citing trade imbalances and other concerns.
Markets have worried that the tariffs could spark a surge in US inflation and drive a stake into the chances that the Federal Reserve cuts interest rates further.
But government data released yesterday showed US consumer inflation had slowed slightly to 2.8 per cent in February — the first full month of Trump’s White House return.
That was slightly better than analysts expected. Core inflation, which excludes volatile food and energy prices, dipped to an annual rate of 3.1 per cent.
“The inflation data are a bright spot in the Federal Reserve’s battle against rising prices. They reinforce the expectation of three rate cuts later in 2025,” said Jochen Stanzl, chief market analyst at CMC Markets.
“Sentiment on Wall Street is so negative that these positive inflation figures could spark a broader recovery in stock prices,” he added.
Wall Street’s main stock indices mostly closed higher with the tech-heavy Nasdaq Composite rising 1.2 per cent.
But the Dow dipped into the red, losing 0.2 per cent.
The “momentum has struggled to sustain itself,” said Daniela Sabin Hathorn, senior market analyst at Capital.com.
In Europe, Frankfurt stocks jumped 1.6 per cent, while Paris gained 0.6 per cent and London added 0.5 per cent.
Analysts said support also came from Ukraine endorsing an American proposal for a 30-day ceasefire, with Russia yet to issue a response.
Stanzl said further developments in US trade policy could shift sentiment “as many investors link tariffs with higher inflation, which could soon undo the hard-won declines achieved by the Federal Reserve.”
In Trump’s latest move, sweeping 25 per cent levies on all US aluminum and steel imports came into effect, hitting numerous nations from Brazil to South Korea, as well as the European Union.
Trump had threatened to double those tariffs on Canada after Ontario imposed an electricity surcharge on three US states, but he called that off after the province halted the charge.
The move nonetheless brought swift ripostes from Canada, which announced nearly US$21 billion (RM93 billion) in additional tariffs on US goods, while the EU said it would target US$28 billion in US imports starting April.
China vowed to strike back, but Brazil, Britain and Mexico held off taking countermeasures.
The on-off nature of Trump’s trade policies has fuelled uncertainty in markets, and has sent the VIX “fear index” of volatility to its highest level since August.
Analysts said high uncertainty in US stock markets made other regions more attractive as investors seek stability.
“Investors are increasingly looking overseas as concerns mount over US stock valuations, monetary policy, and economic uncertainty,” said Charu Chanana, chief investment strategist at Saxo. — AFP
