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Dollar climbs, stocks fall as new tariffs announced

Dollar climbs, stocks fall as new tariffs announced

The U.S. Dollar resumed its upward movement on Wednesday as investors awaited President Donald Trump's next announcement of tariffs.

White House Press Secretary KarolineLeavitt confirmed that Trump would hold a press event at 4 pm EDT (20:00 GMT) on Monday to announce the auto tariffs.

The technology sector was a major factor in the decline of U.S. stock prices on Wall Street. The three major U.S. indices were on course to end a streak of three consecutive gains.

In recent days, stocks have begun to show signs of bottoming after being under pressure from the uncertainty surrounding the tariff outlook. This could slow down the global economy or dent corporate profit. The major U.S. indices are set to experience their first consecutive monthly declines since October 2023, when a two-month period ended.

The Dow Jones Industrial Average dropped 203.42, or 0.48 percent, to 42.384.08, while the S&P 500 fell 73.96, or 1.26 percent, to 5,702.85, and the Nasdaq Composite lost 395.73, or 2.17 percent, to 17,876.12.

The U.S. Commerce Department reported that orders for durable goods rose 0.9%, compared to the economists' estimate for a 1% decline. Businesses rushed to order primary metals and metal products before the tariffs were expected.

Trump announced on Monday that automobile tariffs will be implemented soon. However, he also indicated that not all his levies threatened would be imposed by April 2, and certain countries could receive exemptions. He also levied secondary tariffs of 25% on countries that purchase oil or gas from Venezuela.

Markets are averse to tariff uncertainty. This is especially true when it comes to autos. "Autos are the most affected by tariffs," says Jamie Cox, managing director at Harris Financial Group Richmond Virginia

The dollar index (which measures the greenback in relation to a basket) rose by 0.3%, reaching 104.53, while the euro fell by 0.32%, at $1.0756. The greenback, which dipped on Tuesday is now on course for its fifth increase in six sessions.

The MSCI index of global stocks fell 8.65 points or 1.01% to 844.84, and the pan-European STOXX 600 closed at 0.7% lower as the upcoming tariffs prompted caution.

European stocks outperformed U.S. peers this year, in part on the hope that a German stimulus package would spur growth and counter levies. The STOXX 600 is poised to achieve its largest percentage gain since the 4th quarter of 2022.

The dollar gained 0.33% against the Japanese yen to reach 150.41. Bank of Japan Governor Kazuo Ueda stated that the central bank would have to raise interest rates in order to combat inflation if food prices continue to rise.

Junko Koeda, a new member of the Bank of Japan's board of directors, said that the real interest rates in the country are "extremely" low as inflation is accelerating and wages continue to grow. She declined to say when the central bank would raise interest rates.

The British pound fell 0.47%, to $1.2882, after British Finance Minister Rachel Reeves slashed the government's spending plans to return to her fiscal goals. Data from February showed that British inflation was lower than expected.

U.S. Treasury Yields are higher. The yield on the benchmark 10-year U.S. notes is up 2.4 basis point to 4.333%. This has reversed earlier declines after an auction of 70 billion dollars in five-year bonds.

U.S. Crude rose by 0.81%, to $69.56 per barrel. Brent climbed 0.85% to $73.64 a barrel. This was after data from the government showed that U.S. crude and fuel inventories had fallen last week. The oil market was also buoyed by growing concerns over a tightening global supply after the U.S. threatened to impose tariffs on countries that buy Venezuelan crude.

(source: Reuters)