(Corrects word to ‘threat’ in paragraph 23)
By Sinéad Carew and Nell Mackenzie
NEW YORK/LONDON (Reuters) -MSCI’s global equity index edged up on Monday and longer U.S. Treasury yields ticked higher as the latest U.S. tariff threats kept investors on edge while they waited for inflation readings and the start of earnings season later in the week.
The euro briefly hit an almost three-week low while the dollar index held steady after U.S. President Donald Trump’s weekend threat to impose a 30% tariff on imports from the European Union and Mexico from August 1.
Trump said he was open to discussions, while the European Union accused the U.S. of resisting efforts to strike a trade deal and warned of countermeasures if no agreement is reached.
Meanwhile, the U.S. earnings season is set to begin on Tuesday, with second-quarter reports from major banks. S&P 500 profits are expected to rise 5.8% year-over-year, according to LSEG data. The outlook has dimmed sharply since the early April forecast of 10.2% growth, before Trump launched his trade war.
“It’s all about earnings season now. People are not sure what it’s going to hold. They want to be optimistic. Usually earnings season pans out better than expected,” said Robert Pavlik, senior portfolio manager at Dakota Wealth in Fairfield, Connecticut, while noting that valuations are “a bit expensive relative to the five-year average.”
“That, on top of the most recent tariff announcements, has people sort of just waiting on the sidelines,” said Pavlik.
On Wall Street, the Dow Jones Industrial Average rose 88.14 points, or 0.20%, to 44,459.65, the S&P 500 rose 8.81 points, or 0.14%, to 6,268.56 and the Nasdaq Composite rose 54.80 points, or 0.27%, to 20,640.33.
MSCI’s gauge of stocks across the globe rose 0.90 points, or 0.10%, to 923.46.
Earlier, the pan-European STOXX 600 index ended off 0.06%, above its session lows.
PRESSURING POWELL
Trading in long-dated U.S. Treasuries was choppy, with yields touching multiweek peaks as investors weighed the prospect of an exit by Federal Reserve Chairman Jerome Powell.
While Powell has indicated a patient stance on interest rate policy until the impact of tariffs is clearer, Trump has been pushing for aggressive easing. Trump said on Sunday that it would be great if Powell stepped down.
White House economic adviser Kevin Hassett warned that Trump might have grounds to fire Powell because of renovation cost overruns at the Fed’s Washington headquarters.
The yield on benchmark U.S. 10-year notes rose 1.2 basis points to 4.435% while the 30-year bond yield rose 2.1 basis points to 4.9781%.
finance.yahoo.com
#Equities #rise #modestly #tariffs #inflation #data #earnings #focus
