(Bloomberg) — European stocks dropped in response to US President Donald Trump’s threat to impose 25% tariffs on European Union imports and as more corporate results from the region rolled in.
The Stoxx 600 index fell 0.4%, off its lows for Thursday’s session, with the auto sector the biggest laggard. On the earnings front, Rolls-Royce Holdings Plc shares jumped 16% to a record high after the company raised its profit guidance and announced a stock buyback. WPP Plc slumped 17% after the advertising agency’s sales forecast missed analyst estimates.
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US equity futures rose, with contracts for the S&P 500 and the Nasdaq 100 up at least 0.5%. Nvidia Corp. was little changed in premarket after the chipmaker at the center of the AI spending boom beat fourth-quarter earnings expectations and gave a largely in-line forecast.
Trump gave contradictory statements Wednesday on the implementation of tariffs, keeping investors guessing. A White House official said the European levies could affect all exports from the block, or only specific sectors. The US remains on track to put levies on Mexico and Canada, however it is unclear if they are going to be enacted in March.
“The market wants to see the implementation to price in the worst,” said Michael Nizard of Edmond de Rothschild Asset Management. “Up until now, it was negotiations and the market doesn’t want to correct more.”
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A gauge of the dollar rose, with the yen the biggest decliner against the greenback among Group-of-10 currencies.
Treasuries slipped as traders booked profits on a drop in yields to their lowest levels of the year, while investors waited to see whether US data later Thursday will add to the growing view that an economic slowdown is on the way.
Bitcoin advanced to $86,000 after falling below $84,000 overnight. Oil steadied near the lowest close this year, while gold fell.
Key events this week:
- Eurozone consumer confidence, Thursday
- US GDP, durable goods, initial jobless claims, Thursday
- Fed’s Jeff Schmid, Beth Hammack, Patrick Harker, Michael Barr, Michelle Bowman speak, Thursday
- Japan Tokyo CPI, industrial production, retail sales, Friday
- US PCE inflation, income and spending, Friday
- Fed’s Austan Goolsbee speaks, Friday
Some of the main moves in markets:
Stocks
- The Stoxx Europe 600 fell 0.4% as of 9:49 a.m. London time
- S&P 500 futures rose 0.6%
- Nasdaq 100 futures rose 0.6%
- Futures on the Dow Jones Industrial Average rose 0.2%
- The MSCI Asia Pacific Index fell 0.3%
- The MSCI Emerging Markets Index fell 0.8%
Currencies
- The Bloomberg Dollar Spot Index rose 0.1%
- The euro was little changed at $1.0479
- The Japanese yen fell 0.5% to 149.88 per dollar
- The offshore yuan fell 0.1% to 7.2735 per dollar
- The British pound was little changed at $1.2671
Cryptocurrencies
- Bitcoin rose 2.1% to $86,211.82
- Ether rose 0.8% to $2,358.64
Bonds
- The yield on 10-year Treasuries advanced five basis points to 4.31%
- Germany’s 10-year yield advanced one basis point to 2.45%
- Britain’s 10-year yield was little changed at 4.50%
Commodities
- Brent crude rose 0.7% to $73.06 a barrel
- Spot gold fell 1% to $2,886.74 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Richard Henderson and Divya Patil.
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