London (AFP) – Global stock markets turned mostly lower on Thursday and gold hit a record high amid Federal Reserve concerns that US President Donald Trump’s tariffs and immigration measures could reignite inflation. Corporate earnings also impacted sentiment, with shares in retail behemoth Walmart dropping more than five percent as its outlook disappointed investors. The company is looked on as a bellwether for the US retail sector.
Wall Street’s main indices opened lower, with the S&P 500 coming off another record high. “Investors are mulling the impact of interest rates staying higher for longer, given that policymakers expect US trade policy to push up the price of consumer goods,” said Susannah Streeter, head of money and markets at Hargreaves Lansdown. Minutes from the US central bank’s January meeting suggested officials were not likely to cut interest rates any time soon — having reduced them at three successive meetings — citing worries about the impact of Trump’s policies.
Economists have warned that Trump’s pledge to ramp up tariffs on trade partners while slashing taxes, regulations, and immigration could fan inflation. Geopolitical uncertainty also led gold to hit a fresh record above $2,954 as investors rushed into the safe-haven commodity, which is sought out in times of uncertainty. Briefing.com analyst Patrick O’Hare said, “the negative disposition is rooted in part on concerns about the market’s trading behavior.”
With traders having recently reliably piled into “buy the dip” — that is to push up stocks when they turn lower — O’Hare said more retail investors are piling into the market. “That is when it becomes a bigger short-term risk,” he said, with the potential for much sharper downturns if these short-term investors pull out. Dealers have also been keeping a nervous eye on talks over Ukraine with Trump calling Ukrainian leader Volodymyr Zelensky a “dictator” on Wednesday.
The United States has provided essential funding and arms to Ukraine after Russia’s invasion, but Trump made an abrupt policy shift by opening talks with Moscow. Nevertheless, both Frankfurt and Paris stock markets edged higher, although London slid lower. Asian markets struggled on Thursday. Shanghai managed to pare back early losses to end flat after Trump suggested on Wednesday that a trade deal with China was “possible.”
While Hong Kong dropped more than one percent as the China tech surge came to an end, Tokyo was weighed down by a stronger yen, which briefly broke below 150 per dollar as the Bank of Japan eyes more interest rate hikes.
In company news, a sharp drop in profit left France’s Carrefour supermarket group diving around nine percent in Paris, while industrial giant Schneider Electric gained five percent on strong results. Shares in British Gas owner Centrica rose six percent after it announced additional share buybacks and plans to embark on greater investment. Shares in Lloyds Banking Group rose a similar amount as investors shrugged off its profit drop.
In Frankfurt, Mercedes-Benz receded 1.4 percent after it announced that 2024 profits plunged by almost a third amid a slump in China and weak electric car sales.
**Key figures around 1430 GMT:**
– New York – Dow: DOWN 0.4 percent at 44,463.50 points
– New York – S&P 500: DOWN 0.3 percent at 6,129.29
– New York – Nasdaq Composite: DOWN 0.1 percent at 20,028.95
– London – FTSE 100: DOWN 0.4 percent at 8,676.40
– Paris – CAC 40: UP 0.3 percent at 8,137.69
– Frankfurt – DAX: UP 0.2 percent at 22,487.38
– Tokyo – Nikkei 225: DOWN 1.2 percent at 38,678.04 (close)
– Hong Kong – Hang Seng Index: DOWN 1.6 percent at 22,576.98 (close)
– Shanghai – Composite: FLAT at 3,350.78 (close)
**Exchange Rates:**
– Euro/dollar: UP at $1.0455 from $1.0428 on Wednesday
– Pound/dollar: UP at $1.2619 from $1.2582
– Dollar/yen: DOWN at 149.99 from 151.40 yen
– Euro/pound: UP at 82.87 pence from 82.81 pence
**Oil Prices:**
– West Texas Intermediate: UP 0.7 percent at $72.61 per barrel
– Brent North Sea Crude: UP 0.7 percent at $76.57 per barrel
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© 2024 AFP
