NEW YORK (May 15): U.S. stocks turned higher on the prospect that President Donald Trump will delay imposing tariffs on auto imports. Treasuries and the dollar pared gains.
The S&P 500 wiped out a drop of as much as 0.7%, after Bloomberg reported that the president would postpone by up to six months, a decision on car tariffs that was due by Saturday. German carmakers surged, lifting European shares. The tech-heavy Nasdaq 100 lead benchmarks as Treasury Secretary Steven Mnuchin added to hopes of a trade deal, when he said American officials were in “serious” talks with China.
Treasuries pared gains after the two-year yield touched the lowest level since February 2018, while the 10-year rate traded around 2.38%. Oil reversed losses. The dollar cut its advance about in half and the Japanese yen trimmed its rise.
The possibility that the president will delay trade penalties on cars helped ease investors concerns about Trump’s protectionist turn. However, investors remain on edge after unexpectedly weak U.S. and Chinese economic numbers Wednesday heightened concerns that the trade war with China could weigh on a global economy that’s already staggering.
“Trade is far and away the more dominant story right now, but sales should not go unnoticed ahead of Consumer Confidence reads later this week,” said Mike Loewengart, vice president of investment strategy at E*TRADE Financial. “Many view retail as a key economic bellwether, and so weakness in the sector could give the bears more to sink their teeth into.”
Here are some notable events coming up this week:
Earnings this week include Cisco, Nvidia. Bank of Indonesia has an interest rate decision on Thursday. Australian unemployment is out on Thursday.
And here are the main market moves:
The S&P 500 Index rose 0.4% as of 11:23 a.m. New York time. The Stoxx Europe 600 Index gained 0.2%. Germany’s DAX Index advanced 0.7%. The MSCI Emerging Market Index added 0.2%. The MSCI Asia Pacific Index advanced 0.5%, the biggest gain in six weeks.
The Bloomberg Dollar Spot Index climbed 0.1%. The euro was little changed at US$1.1208. The British pound dipped 0.3% to US$1.2867. The Japanese yen rose 0.1% to 109.48 per dollar.
The yield on 10-year Treasuries fell three basis points to 2.38%. Germany’s 10-year yield dipped three basis points to -0.1%. Britain’s 10-year yield declined four basis points to 1.063%.
West Texas Intermediate crude rose 0.1% to US$61.81 a barrel. Gold advanced 0.1% to US$1,297.00 an ounce.