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US stocks almost flat amid trade tensions; euro hits 4-year high
The U.S. stock market was little changed on Wednesday, as the trade war between America and its trading partners intensified investor anxiety. Meanwhile, the euro reached its highest level in four months against U.S. dollars. Trade tensions weighed on oil prices, which fell by a sharp amount, and are now set to lose a third consecutive day. This is due to the fact that U.S. crude stocks grew more than expected. Howard Lutnick, the U.S. Commerce Department's chief, told Bloomberg in an interview that President Donald Trump may consider protecting certain sectors from tariffs. His administration will announce tariffs on Canada and Mexico later on Wednesday. The U.S. tariffs against imports from Canada and Mexico, as well as China, went into effect Tuesday. Trump delivered his State of the Union Address, where he lauded his achievements since assuming office six weeks earlier. Canada and China immediately retaliated, while Mexican president Claudia Sheinbaum suggested that her country might look for new trade partners. Rick Meckler of Cherry Lane Investments in New Vernon New Jersey said that stocks are volatile due to the uncertainty surrounding tariffs. He said that a trade war which escalates is a bad thing. Investors also digested the ISM survey which revealed that the U.S. service sector activity was in expansion territory with 53.5, higher then expectations of 52.6. The Dow Jones Industrial Average rose by 123.66, or 0.29, points to 42,648.78. The S&P 500 gained 3.20, or 0.06, points to 5,781.35, and the Nasdaq Composite increased by 25.61, or 0.14, points to 18,310.77. The MSCI index of global stocks rose by 6.52 points or 0.77% to 852.66. The pan-European STOXX 600 rose by 0.91%. Defense stocks in the region have soared this month on the prospect of an increase in European security spending. The euro rose 1.32% to $1.0764 and is on course for its biggest weekly gain since November 20,22. The euro got a boost on Tuesday night when the German political parties agreed on a 500-billion-euro ($534.75-billion) infrastructure fund, and crucially a change in borrowing limits, which economists called "a really large bazooka". The German government's overhaul of its borrowing led to the largest sell-offs in debts since the 1990s. Investors weighed the uncertainty around Trump's tariffs while assessing the economic data. The yield on the 10-year U.S. note rose by 2.5 basis points, to 4.235% from 4.21% at Tuesday's close. Investors were also watching the National People's Congress's first annual session, where Beijing reaffirmed its goal of a 5% growth in the economy by 2025. The dollar fell 0.20%, to 7.237, against the offshore Chinese Yuan. U.S. crude oil fell by 4.39%, to $65.27 per barrel. Brent fell 3.76% to $68.37 a barrel. (Additional reporting from Amanda Cooper in London, and Kevin Buckland, in Tokyo. Editing by Jacqueline Wong and Clarence Fernandez; Jan Harvey, Christina Fincher, and Richard Chang.)
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Brazil's leadership is based on its commitment to climate multilateralism, says COP30 President
Brazil will use its annual presidency of the United Nations global climate talks in order to push for multilateralism, and to respect science. COP30 President Designate Andre Aranha Correa do Lago stated this on Wednesday as a response to U.S. president Donald Trump regarding climate issues. Correa do Lago, the incoming leader for COP30, spoke at the U.N. General Assembly, New York. He stressed the importance of international collaboration during the summit of November in the Amazonian town of Belem. The address was delivered during a turbulent period of climate politics in the United States, as Trump pulled the country - the biggest historical emitter - from the Paris Climate Agreement and retracted American global climate financing during his first few weeks in office. Trump also removed the U.S. from key U.N. assessments of climate change. Last week, his advisers who are tasked with reducing the size and scope of the federal government cut hundreds of staff from the U.S. National Oceanic and Atmospheric Administration. This agency conducts vital climate research. "Brazil is convinced that humanity cannot progress without rapid, deep and sustained co-operation among all countries," Correa do Lago stated, without mentioning Trump's policies on climate change. He said that "multilateral institutions must and can deliver results commensurate to the size of the climate challenges." Correa do Lago stated last week that China will have a significant role to play in the face of the U.S. stepping away from climate leadership. Reporting by Gloria Dickie, Editing by Frances Kerry
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UK stocks stabilize after sell-off; eyes on US tariff movements
Investors were looking for any reprieve in U.S. Tariffs. The blue-chip FTSE 100 closed level, while the domestically focused FTSE 250 climbed by 0.9% following its worst session for seven months on February 2. The small cap index rose 0.7%. Sterling's four-month high against dollar helped limit gains on the FTSE 100. Dollar earners like Unilever, British American Tobacco, and British American Tobacco were also affected. Shell was also hit by a sharp fall in oil prices. Blue-chips fell from their record highs the previous session, after U.S. president Donald Trump's new duties on major trading partners went into effect. The U.S. Secretary of Commerce's comments about possible exemptions from Mexican and Canadian duties kept negotiations alive. Trump's remarks that Ukraine is ready to negotiate an end to war with Russia helped to lift the mood, following a sharp confrontation with President Volodymyr Zelenskiy last weekend. The index that tracks precious metals miners jumped 4.6%. It was the largest sectoral gainer. The FTSE 100 was also lifted by financial shares, as the bank sector rose 1.8% following a drop of more than 3% Tuesday. After the parties hoping for a new German government decided to change borrowing rules and increase spending on government, especially defence, the British bond price dropped. The British defence industry grew by 3.1%. Construction and materials, travel and leisure and other economically sensitive sectors all saw gains. The UK S&P Services Purchasing Managers' Index fell slightly in February, from 51.1 to 51. The survey revealed that services firms have cut the most staff since 2020, ahead of tax and minimum wage hikes next month. Games Workshop shares rose by 3.2% among individual stocks after the miniature-wargame maker predicted a profit in 2025 that was above expectations. Quilter climbed 6.6% after the wealth manager beat annual profit expectations and set aside a smaller-than-expected 76 million pound ($97 million) cost provision for its ongoing advice review. (Reporting and editing by Shreya Biwas and Alex Richardson in Bengaluru, and Lisa Mattackal from Bengaluru)
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Sylvester Turner, a Democratic congressman from Texas, died at the age of 70
Former Houston mayor Sylvester Turner died on Tuesday. He was sworn in as a Democratic U.S. Rep. by President Donald Trump. Turner's death, at 70 years old, has temporarily increased the Republicans' narrow majority in the U.S. House of Representatives from 218 to 214. To fill the vacancy, a special election will be needed to elect Turner's successor. Turner was mayor of Houston between 2016 and 2024. He was elected to the House last year, replacing Sheila Jackson Lee who passed away in July 2024. Turner's office, according to a spokesperson, would release a statement in the near future. Sheila Jackson Lee died at age 74 in July 2024. Turner, in a video posted Tuesday outside his Washington office, said that he would be bringing a constituent to Trump's speech whose daughter suffered from a rare genetic condition and was dependent on Medicaid for her treatment. Turner wrote: "My message to the administration tonight for the State of the Union is 'Don't mess up Medicaid'." "President Trump's and Elon Musk’s push to gut Medicaid amounts to a betrayal for the most vulnerable of us." Republicans are trying pass a bill to cut spending on social programs that include Medicaid, the health insurance program for low-income individuals, in order to pay for Trump’s tax cuts plan. Social media flooded with tributes from Democratic politicians to Turner. On Wednesday, Representative Greg Casar from Texas told reporters in the Capitol that Turner was a "dedicated public servant." Representative Terri Sewell posted on X about Turner's "extraordinary legacy of service". Two other seats in the House are vacant. They were previously held by Republican Reps Matt Gaetz, and Michael Waltz from Florida. Both seats will be filled by special elections on April 1, and Republicans should win, increasing Trump's majority back to 220. (Reporting and editing by Scott Malone, Nick Zieminski and Scott Malone; Gabriella Borter and Bo Erickson)
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EIA: US crude stocks rise as fuel is drawn down due to refinery maintenance.
Data from the Energy Information Administration on Wednesday showed that U.S. crude stockpiles increased more than expected, whereas gasoline and distillate inventory fell, as product exports grew amid refinery spring repairs. The EIA reported that crude inventories increased by 3.6 millions barrels, to 433.8 million in the week ending February 28. This was compared to analysts' expectations based on a poll of 341,000 barrels. Refinery crude runs dropped by 346,000 barrels a day (bpd), and utilization rates fell 0.6 percentage points to 85.9%. Due to seasonal maintenance, rates have been hovering around 85% ever since mid-January. Refinery utilization rates on the East Coast fell to their lowest level since July 2020. They dropped to 54.8% from 82.5% the previous week. The EIA reported that gasoline stocks dropped by 1.4m barrels last week, to 246,8m barrels. This was compared to expectations of a 369,000 barrel draw. The Midwest's gasoline inventories rose to 60.42 million barrels in the week, which is the highest level since February 2024. The data revealed that distillate stocks, which includes diesel and heating oil fell by 1.3m barrels last week, to 119.2m barrels. This was in contrast to expectations of a 222,000-barrel increase. Giovanni Staunovo is an analyst at UBS. He said: "I think the report is positive, as total petroleum inventories are declining, despite the crude build-up, which is due to U.S. refining plants still being in maintenance." The recovery of U.S. exports has also contributed to the larger refinery product draws in last week. The data revealed that U.S. exports of products jumped from 5.4 to 7 million bpd in the previous week. Brent crude and U.S. West Texas Intermediate oil futures both extended their losses following the data. Both benchmarks fell by more than $2 a barrel. Brent crude fell to $68.70 - its lowest price since December 2021 - due to fears over U.S. crude production, OPEC+'s output increase and Trump tariffs. The EIA reported that crude stocks at Cushing, Oklahoma's delivery hub, rose by 1.1million barrels during the past week. The EIA reported that net U.S. crude exports dropped by 54,000 barrels per day last week. (Reporting and editing by Stephanie Kelly, Liz Hampton)
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US approves LNG export extension for Golden Pass
The U.S. Department of Energy announced on Wednesday that it had approved a permit extension for exports of natural gas liquefied from the Golden Pass LNG LLC, a joint venture between QatarEnergy ExxonMobil, which is being built in Texas. The $10 billion Sabine Pass project, currently under construction in Texas, will be able to export LNG to major markets in Asia and Europe with the approval of this extension. Exports could start as soon as this year. The DOE stated that it would become the ninth major export terminal in the United States once built. QatarEnergy holds 70% and ExxonMobil has the rest of the joint-venture. The DOE approved Golden Pass as the first project to export LNG to countries that did not have a free trade agreement during the first Trump Administration. It is pleasing to see this project so close to delivering its first LNG, said Tala Goudarzi, a department official from the fossil energy and carbon division. After former president Joe Biden halted LNG exports to study economic and environmental impacts, the administration of Donald Trump has approved them. The U.S. exports the most LNG in the world. Golden Pass' developers requested federal energy regulators for a three year extension in August to complete the construction of the project. They claimed that a change in main contractors required an extension until Nov. 2029. Golden Pass has not responded to our request for a comment immediately. Golden Pass, when completed, will be able to export LNG up to 2,57 billion cubic feet a day.
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Commerce chief: Trump will consider tariff relief for sectors that comply with the trade agreement
The U.S. Commerce Department head said that President Donald Trump may consider protecting certain sectors, such as automakers, from U.S. Tariffs. His administration will announce tariffs on Canada and Mexico later on Wednesday. Howard Lutnick, in an interview with Bloomberg TV, said that Trump would be the one to make the final decisions on whether or not to provide relief to specific industries. He said that the 25% tariff on Canada and Mexico will remain in place with a view to renegotiating an agreement with these two countries next year. The Commerce secretary stated that "the president has the right to decide." "But we expect that there will be categories. There will be 25 percent, but there will still be categories that are left out. Autos could be one of them. It could be other things as well. Lutnick stated that the administration is examining the U.S. Mexico Canada Agreement and whether certain sectors have complied with this deal enacted during Trump's first tenure in office. Lutnick responded to Bloomberg when asked if autos would be exempt from the tariffs which went into effect on early Tuesday: "It is not an exemption." Trump's schedule is empty after his late-night speech to Congress, Tuesday. The Commerce chief has not said when the announcement will be made on Wednesday. Lutnick floated the idea for tariff relief on companies that adhere to the USMCA origin rules on Tuesday. This was just hours after Trump imposed 25% penalties on all imports coming from Canada, Mexico and China and an additional 10% on Chinese goods. Canada dismissed Trump's claim that the three countries haven't done enough to stop the flow of fentanyl, and its precursor chemicals leading to opioids. Tariffs are a major problem for automakers who produce in three different countries, and ship their parts multiple times across the border as they build up systems and vehicles. BOON FOR DELTROIT Ford, General Motors, and Stellantis would benefit from a tariff exemption for cars and trucks which comply with the USMCA’s complex North American Content Rules for duty-free entry to the U.S. Market. The vehicles are compliant with the USMCA's complex 75% North American Content rules, which were agreed upon by Trump in his first term. This was to keep part production in the area. To qualify for duty-free access to the region, 40% of the passenger car content must be made in the United States, or Canada. This is based on the list of "core components" which includes engines, transmissions and body panels. The threshold for pickups is 45%. Some foreign automakers, such as Honda and Toyota, with large U.S. manufacturing footprints would also benefit from an exemption, but competitors who don't comply will have to pay the entire 25% U.S. Tariff. Sources familiar with the talks said that the relief being considered would also eliminate 10% of the tariff on Canadian energy products, like crude oil and gasoline which meet the USMCA rules for origin. Sources from the auto industry said that a 30-day exclusion was an option, but companies would have to show plans to invest in U.S. manufacturing. A source familiar with this matter says that Trump will speak to Justin Trudeau, the Canadian Prime Minister on Wednesday. Lutnick met with Detroit automakers to discuss the issue recently and said that they would be discussing their compliance with Trump's 2020 trade agreement signed during his first term. If you comply with the agreements, then you may avoid tariffs. But if you don't comply, you do so at your risk. Lutnick stated that you knew that you were not complying. Lutnick said the new reciprocal tariffs would be implemented on April 2. Some could be imposed immediately, while others may take several weeks or even months. These tariffs would be equal to the import duty rates of other countries, and they would offset their non-tariff obstacles. They would also hit Canada and Mexico but could pose a greater problem for the European Union. The EU has higher vehicle tariffs that the U.S.
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Sources: RPT-US has withdrawn from its plan to assist major polluters in moving away from coal.
Sources in several key countries participating said that the United States was withdrawing from Just Energy Transition Partnership. This is a collaboration among richer nations to assist developing countries to transition from coal energy to cleaner alternatives. The JETP was unveiled for the first time at the U.N. Climate Talks in Glasgow, Scotland, in 2021. South Africa, Indonesia and Vietnam were announced as the recipients of grants, loans and financial guarantees to help them move away from coal. Joanne Yawitch is the head of the Just Energy Transition Project Management Unit for South Africa. She said that on Wednesday, the United States informed them about their withdrawal from the project. Two foreign officials who had direct knowledge of this matter in Vietnam said that Washington was withdrawing its participation in JETP. One of these officials said the U.S. also ceased to participate in all JETP programs, including those in Indonesia. A second source with knowledge of the issue said that the U.S. has withdrawn from the JETP program in South Africa and Indonesia. Another source from the South African donor group said, "We were informed by the U.S. that they have withdrawn." The person who spoke said, "There is still significant funding available and the International Partners Group remains committed to helping South Africa achieve its just energy transformation through partnership." Since Donald Trump's return to office as President in January, Washington has cut foreign aid and promoted the development of fossil energies. The U.S. State Department did not respond immediately to a comment request. Sources declined to name themselves as they weren't authorised to comment on the issue. The U.S. has pledged $11.6 billion to South Africa, but only $1.063 billion of that amount was committed. Reporting by Tim Cocks from Johannesburg, Francesco Guarascio from Hanoi and Fransiska Nanangoy in Jakarta. Writing by Sudarshan Varadan Editing by Tony Munroe, Sharon Singleton.
Oil prices fall as OPEC+ plans a higher output and U.S. Tariffs hammer sentiment
Investor sentiment was hammered by the third consecutive session of oil price declines as major producers announced plans to increase production in April. This is coupled with fears that U.S. Tariffs on Canada Mexico and China would slow down economic growth and fuel demand.
Brent futures were 15 cents lower at $70.89 per barrel by 0200 GMT. The contract had fallen to its lowest level since September 11 and was settled at that lowest price.
U.S. West Texas Intermediate crude (WTI), which had settled at its lowest price since December, fell by 40 cents per barrel or 0.6% to $67.86. Prices dropped to $66.77 during the previous session. This was the lowest price since November 18.
Analysts at Citi stated that the "OPEC+ decision" to increase production again was a "materially bearish development", as it would loosen markets just at the time when U.S. macro-data are beginning to soften.
The Organization of the Petroleum Exporting Countries (OPEC+) and its allies, including Russia, a collective known as OPEC+ decided Monday to increase production for the first since 2022.
The group plans to increase production by 138,000 barrels a day starting in April. This is the first of planned monthly increases that will unwind nearly 6 million barrels a day of reductions, which equals nearly 6% global demand.
Tuesday, a 25% tariff was imposed on all Mexican imports. A 10% tariff was imposed on Canadian energy. And the duties on Chinese products were doubled to 20%. The Trump administration has also imposed tariffs of 25% on all Canadian imports.
Economists see the self-declared U.S. trade war declared by President Donald Trump as a recipe that could lead to fewer jobs, slower economic growth and higher prices which may kill demand. Lower economic growth is likely to impact fuel consumption for the world's largest oil consumer.
According to traders and analysts, the retail price of gasoline in the United States is expected to rise as a result of the new tariffs on energy imports.
The Trump administration announced on Tuesday that it would end a license granted by the U.S. to U.S. oil company Chevron to operate in Venezuela since 2022 and to export its oil.
Market sources cited American Petroleum Institute data on Tuesday to confirm that U.S. crude stockpiles fell by 1,46 million barrels during the week ending February 28. Investors are now awaiting government data due Wednesday on U.S. oil stockpiles. (Editing by Christian Schmollinger).
(source: Reuters)