MSCI’s global equity index edged down yesterday and US Treasury yields edged higher as the latest US tariff threats kept investors on edge while they waited for inflation readings and the start of earnings season due later in the week.
The euro briefly hit an almost three-week low while the dollar index held steady after US President Donald Trump’s threat to impose a 30pc tariff on imports from the European Union and Mexico from August 1.
European shares fell yesterday after the tariff threat. The EU said it would extend a suspension of countermeasures to US tariffs until early August and continue to press for a negotiated settlement, though Germany’s finance minister called for firm action if the levies went ahead.
The latest tariff salvo comes as US earnings season begins this week, with the major banks leading the pack. S&P 500 profits are expected to rise 5.8 per cent from the year-ago quarter, according to LSEG data.
On Wall Street at 10:54 a.m. the Dow Jones Industrial Average fell 53.36 points, or 0.12pc, to 44,318.15 while the S&P 500 fell 6.66 points, or 0.11pc, to 6,253.09.
The Nasdaq Composite rose 18.05 points, or 0.09pc, to 20,603.58.
MSCI’s gauge of stocks across the globe fell 1.07 points, or 0.12pc, to 921.49 while the pan-European STOXX 600 index fell 0.26pc.
In US treasuries, the yield on benchmark US 10-year notes rose 1 basis point to 4.433pc, from 4.423pc late on Friday while the 30-year bond yield rose 2.2 basis points to 4.9791pc.
The 2-year note yield, which typically moves in step with interest rate expectations for the Federal Reserve, fell 1.8 basis points to 3.896pc, from 3.914pc late on Friday.
Besides earnings season, investors are also waiting for US consumer price data for June, due today, and will monitor for any upward pressure from tariffs.
They will also watch for any tariff impact to supply chain costs in producer price and import price figures also due this week along with a view of consumer health in retail sales data.
In currencies, the dollar index, which measures the greenback against a basket of currencies including the yen and the euro, rose 0.09pc to 97.98.
The euro was down 0.08pc at $1.168 while against the Japanese yen, the dollar strengthened 0.07pc to 147.51.
The Mexican peso weakened 0.65pc versus the dollar at 18.767, with Mexican President Claudia Sheinbaum confident a trade deal could be reached before the August deadline.
Bitcoin crossed the $120,000 level for the first time and was last up 1.48pc at $120,891.36.
Oil prices fell yesterday after touching their highest level in three weeks, as investors eyed further US sanctions on Russia and the threat of tariffs that may affect global supplies.
US crude fell 0.64pc to $68.01 a barrel and Brent fell to $70.07 per barrel, down 0.41pc on the day.
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