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Gold and stocks both rise ahead of Trump’s 'Liberation Day" tariffs

The stock market fell on Wednesday as investors worried about the risk of a global trade war intensifying.

In recent weeks, investors have been focused on the new round reciprocal levies which the White House will announce at 2000 GMT on Wednesday. These are expected to go into effect immediately following the announcement.

Trump has already imposed duties on autos, aluminium and steel, as well as increased duties on all Chinese goods. This has rattled the markets, with fears growing that a full-blown global trade war may trigger a sharp economic slowdown.

The European markets were relatively quiet, with stock prices pointing lower and currencies and bond yields remaining stable.

The STOXX 600 European benchmark fell 0.9% in one day. This was mainly due to declines in the pharmaceutical sector, which is a heavyweight.

The volatility measures - which are often used as a proxy to measure investor anxiety - have increased, indicating the rush of traders at the last minute to hedge against large price swings in currencies, stocks, and bonds.

Daiwa Capital's Chris Scicluna, an economist at the firm, said: "I doubt that what's announced today will be in place nine months from now because we're aware of negotiations."

He said that it was difficult to predict the impact of the rate hikes, or any other changes in the stock market, on the economy.

Wall Street's benchmark S&P and Nasdaq both ended the session higher, after earlier losing ground. The Dow ended a little lower.

Futures on S&P 500 and Nasdaq declined by 0.3-0.4%.

Investors hope for clarity and the beginning of the deal-making process. Tariffs are already affecting business sentiment and will likely lead to a drop in global economic activity over the next few months," said Ben Bennett of Legal & General Investment Management, Asia-Pacific Investment Strategist.

SOFT DATA

Investors are becoming increasingly concerned by signs such as rising prices, a slowing economy and cracks on the labour market.

The data showed that U.S. manufacturing shrank in March, after two months of growth. A measure of inflation in the factory gates jumped to its highest level in almost three years due to rising concern over tariffs on imported products.

The Labour Department reported on Tuesday that U.S. employment opportunities fell by 194,000 in February to 7.568 millions as tariff uncertainty dampened labour demand.

The yield of the benchmark 10-year Treasury bill in the United States was up by 1 basis point to 4,168% after falling to 4,133% on February, its lowest level since April 4.

The currency markets were quiet. The dollar fluctuated between $1.2916 and $1.0797. The dollar remained at 149.55 yen.

But the focus will be on the tariff details. This is especially true after a report in a major media outlet said that Trump's advisers were considering a plan to raise duties by around 20% on nearly all products, instead of targeting specific countries or products.

Chris Weston is the head of research for Pepperstone. He said, "We are heading into Trump's time to shine, with many already having deleveraged in order to run a neutral or flat position on equity, USD (dollar), and Treasuries."

Gold, which is seen as a safe haven against economic and political turmoil, has risen 0.5%, to $3.125 per ounce. This is just a little below the record high of Tuesday.

Gold is up 19% this year. This follows a gain of 27% in 2024, which was the best performance it had in a decade.

Brent futures are down 0.5% at $74.06 per barrel while U.S. Crude Futures are down 0.6% at $70.77 per barrel. (Ankur Banerjee contributed additional reporting from Singapore; editing by Shri Navaratnam, Tomasz Janowski and Ankur Banerjee)

(source: Reuters)