London (AFP) – Global stock markets mostly moved higher on Tuesday, with tech and tariffs in the spotlight. Traders were still assessing the tariff plans of incoming US president Donald Trump following a report he may take a more targeted approach than previously stated.
“After a sluggish December, US stocks have kicked off the year in style, with tech and semiconductors stealing the spotlight,” noted Matt Britzman, senior equity analyst at Hargreaves Lansdown. He added there was also “tariff optimism despite mixed signals.” The Washington Post said Trump’s aides were weighing plans to apply tariffs to goods only in certain critical sectors — a narrower definition than the president-elect previously proposed. Trump, however, described the Post story as “just another example of Fake News.” The report comes after Trump warned last year that he would slap huge levies on China, Canada, and Mexico.
Tech stocks surged on Monday as Nvidia — which drove a rally in the sector last year thanks to its AI chips — provided a positive outlook. Its shares popped more than 3.4 percent to close at a new record, giving the company a market valuation of more than $3.6 trillion. Nvidia shares rose another 0.9 percent at the start of trading on Tuesday after it unveiled new AI chips at the Consumer Electronics Show late Monday.
The tech-heavy Nasdaq composite only edged 0.3 percent higher, with shares in Apple and Tesla falling after an analyst downgrade, noted Briefing.com analyst Patrick O’Hare. “There hasn’t been a rush, however, to exit the stock market.” He pointed to the rising yield on US government bonds also acting as a drag as traders get back to business after the holidays. “What everyone is waiting to see is if it will be back to a bull market or back to a market that is inclined to do some backing up as rates move up,” said O’Hare.
There have been mounting concerns that Trump’s tariff plans along with pledges to slash taxes, remove regulations, and crack down on immigration will reignite US inflation, putting pressure on the Fed to keep borrowing costs higher for longer. Higher interest rates make it more expensive for companies to borrow, dampening earnings and the attractiveness of holding stocks relative to bonds. Friday’s US non-farm payroll report is the next big marker for investors hoping for some idea about the Fed’s plans for rates after recently scaling back its forecasts for cuts in 2025.
Ahead of him taking office on January 20, the US Defense Department on Tuesday added tech giant Tencent and battery manufacturer CATL to a list of companies it says are affiliated with Beijing’s military. China accused Washington of “unjustified suppression,” while Tencent’s shares plummeted more than seven percent in Hong Kong. CATL stock sank 5.2 percent.
Elsewhere, the euro strengthened against the dollar as official data showed eurozone inflation accelerated in December to 2.4 percent. Higher eurozone inflation will make it more difficult for the European Central Bank to cut interest rates in order to boost sluggish growth.
– Key figures around 1430 GMT –
New York – Dow: UP 0.4 percent at 42,880.47 points
New York – S&P 500: UP 0.4 percent at 5,998.51
New York – Nasdaq Composite: UP 0.3 percent at 19,926.87
Paris – CAC 40: UP 0.8 percent at 7,505.62
Frankfurt – DAX: UP 0.7 percent at 20,362.03
London – FTSE 100: DOWN 0.2 percent at 8,235.12
Tokyo – Nikkei 225: UP 2.0 percent at 40,083.30 (close)
Hong Kong – Hang Seng Index: DOWN 1.2 percent at 19,447.58 (close)
Shanghai – Composite: UP 0.7 percent at 3,229.64 (close)
Euro/dollar: UP at $1.0398 from $1.0388 on Monday
Pound/dollar: UP at $1.2548 from $1.2518
Dollar/yen: UP at 157.72 yen from 157.64 yen
Euro/pound: DOWN at 82.92 pence from 82.98 pence
Brent North Sea Crude: UP 0.8 percent at $76.91 per barrel
West Texas Intermediate: UP 0.7 percent at $74.05 per barrel
© 2024 AFP
