Stocks up, US Treasury yields firm as investors await consumer price data
Photo: AFP
Stocks rose and U.S. Treasury yields strengthened on Wednesday as investors reacted to the latest round of U.S. tariffs and Federal Reserve Chair Jerome Powell's indication of a cautious approach to rate cuts.
Financial markets were largely biding time ahead of a reading on U.S. consumer prices due later in the day which could guide the outlook for monetary policy there, particularly as policymakers weigh the potential inflationary impact of Donald Trump's tariffs on the economy, News.Az reports, citing Reuters.
The U.S. President on Monday raised tariffs on steel and aluminum imports to 25% from the previous 10%, eliminated country exceptions, as well as product-specific exclusions, and promised to announce global reciprocal tariffs within days.
But Trump also said he was considering an exemption for Australia and that the steel and aluminum measures would only take effect from March 4, keeping alive the possibility that the duties are being used as a negotiating tool.
Mexico, Canada and the European Union on Tuesday condemned the move, with the EU saying the 27-nation bloc would take "firm and proportionate countermeasures".
MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.32%, following a mixed session on Wall Street as gains in Coca-Cola and Apple (AAPL.O), opens new tab offset losses in Tesla.
Early on Wednesday, EUROSTOXX 50 futures were up 0.2% while FTSE futures eased 0.05%.
Nasdaq futures ticked 0.08% higher. S&P 500 futures shed 0.02%.
Elsewhere, China's CSI300 blue-chip index fell 0.29%, while the Shanghai Composite Index slipped 0.16%.
Hong Kong's Hang Seng Index advanced 0.7%. Hong Kong-listed shares of Alibaba surged
more than 5% after a media report that it is partnering with Apple to roll out artificial intelligence features for iPhone users in China.
Japan's Nikkei rose 0.25%, ahead of SoftBank Group's results due later in the day.
Treasury yields maintained gains after Powell's testimony as investor attention turns to the latest reading of consumer prices on Wednesday.
The yield on benchmark U.S. 10-year notes held near a one-week high at 4.5332%, while the two-year yield steadied at 4.2917%.
Markets have been slowly scaling back expectations for Fed rate cuts this year, largely expecting the U.S. central bank to hold rates steady at its March and May meetings.
Powell on Tuesday said "We are in a pretty good place with this economy", noting that the Fed was in no hurry to make any further interest rate cuts, but stood ready to do so if inflation declines further or the job market weakens.
In currencies, the dollar's tariff-driven rally hit pause on Wednesday, as it slipped modestly against most of its major peers save for the yen.
Against the greenback, the euro ticked up 0.02% to $1.0363, while sterling edged 0.04%
higher to $1.2451.
The Aussie dollar rose 0.06% to $0.6299.
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