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Oil and stocks gain as traders ignore Trump's tariff news

The European stock market rose on Wednesday, as traders appeared unconcerned about the announcement by U.S. president Donald Trump that he will impose a tariff of 50% on imported copper. He also announced he would introduce levies up to 200% on pharmaceuticals.

Trump's remarks on Tuesday caused the price of Copper to reach record highs, and Wall Street to close down.

The equity markets quickly shrugged the news off. Asian stocks were mixed over night and the MSCI World Equity Index rose 0.1% at 0956 GMT.

The London FTSE 100 rose 0.2%, while the pan-European STOXX 600 rose 0.8%.

Wall Street futures showed that the gains would continue, with S&P and Nasdaq both up 0.1%.

The U.S. Dollar Index was unchanged at 97.567, and the euro dropped 0.1% to $1.1714.

The dollar reached its highest level against the yen in over two weeks, with Japan, which depends on exports, being the most far away from a deal between Washington and Washington among the major U.S. trade partners.

U.S. Copper Futures have risen by over 10%, reaching a new record, after Trump threatened to increase duties on this metal, which is essential for electric vehicles, military equipment, the power grid, and many consumer products.

The traders are waiting for further developments in Trump’s trade war, following his announcement on Monday to 14 countries that they would face sharply increased tariffs after the new deadline of August 1st.

Trump said that he "probably" would tell the European Union in two days the rate at which it can expect to receive its exports from the United States.

The EU has struggled to obtain immediate tariff relief and an agreement from the U.S. not to introduce any new measures. This is according to the head of the European Parliament’s Trade Committee, who has been negotiating for the bloc.

On Wednesday

Investors are worried that tariffs could increase inflation and slow down economic growth. They will be watching the minutes of the U.S. Federal Reserve's latest meeting, which will be released on Wednesday.

Amelie Derambure is a senior multi-assets portfolio manager at Amundi. She said: "We are in the dark about tariffs because it's difficult to know their impact on the end-inflation or the margins of U.S. corporations, or on corporates in general."

The uncertainty is enormous.

Derambure stated that although equity markets expect tariffs to manageable, and are supported by the underlying expectation of growth. The impact of tariffs can be seen through the rising yields of fixed income.

The yields on U.S. Treasury bonds rose Tuesday and the auction for three-year Treasury notes saw a weak demand.

Treasury will be selling $39 billion of 10-year bonds on Wednesday, and $22 billion of 30-year bonds on Friday.

The yield on the 10-year U.S. Treasury fell back to 4.4072% early Wednesday morning, down from its peak of 4.435% that was reached Tuesday, which marked its highest level in over three weeks.

The benchmark German 10-year yield was 2.637%.

Gold is in its third consecutive day of declines. It was down 0.3% for the day, at $3,290 an ounce.

Brent crude futures rose by 0.4% to $70.42.

(source: Reuters)