Stocks, Bonds Rise as Trump Signs Off on Tariffs: Markets Wrap

U.S. to impose 25% levy on steel and 10% on aluminum

Greenback rises against euro; Treasury yields decline

Draghi Says Change in ECB's Language Was Unanimous

U.S. stocks rose after President Donald Trump announced tariffs that were narrower than some traders had anticipated. Treasuries and the dollar gained.

The S&P 500 advanced for the fourth time in five days as investors found relief in the president’s decision to exclude Canada and Mexico while giving other countries wiggle room from levies on imports of steel and aluminum. Technology shares paced gains. Ten-year Treasury yields fell to 2.86 percent.

The dollar rose against the euro after the European Central Bank’s decided to drop a pledge to increase asset purchases if necessary, and as President Mario Draghi downplayed the change. Crude oil traded near $60 a barrel and gold slipped as a Bloomberg gauge of commodities slid for a second day.

President Donald Trump speaks with reporters about his tariff plans during a Cabinet session at the White House.

(Source: Bloomberg)

“Investors have to take a deep breath and watch what the reality is. It’s a highly complex situation that investors have to try to game, where they believe these [Nafta] negotiations will finally land,” said Chad Morganlander, a portfolio manager at Washington Crossing Advisors, said by phone. “This is a lever for negotiating the Nafta deal, and investors are watching this in a careful way, with one eye on the market and one eye on trade negotiations.”

The specter of a global trade war has had markets on edge this week, as Trump’s threats of steel and aluminum tariffs were met with talk of retaliation in China and Europe. The ECB’s surprise change in language signaled its confidence in the euro area economy even as the concerns rumble on. However in his press briefing after the decision, Draghi acknowledged that protectionist threats represent a downside risk and described unilateral trade decisions as “dangerous.” Investors are now eyeing the upcoming central bank decision in Japan.

Terminal users can read more in our markets blog.

Here are some key events coming up this week:

The Chinese People’s Political Consultative Conference runs through March 15 and overlaps with the National People’s Congress meetings in Beijing, through March 20.

BOJ monetary policy decision and briefing on Friday.

U.S. monthly payrolls data come Friday.

And these are the main moves in markets:

Stocks

The S&P 500 Index rose 0.45 percent to 2,738.97 as of 4 p.m. New York time.

The Stoxx Europe 600 Index increased 1.1 percent to the highest in a week.

The U.K.’s FTSE 100 Index rose 0.6 percent.

The MSCI Emerging Market Index gained 0.4 percent to the highest in more than a week.

Currencies

The Bloomberg Dollar Spot Index increased 0.4 percent.

The euro fell 0.8 percent to $1.2315.

The British pound declined 0.6 percent to $1.3814, the first retreat in more than a week.

The Japanese yen dropped 0.2 percent to 106.25 per dollar.

The MSCI Emerging Markets Currency Index fell 0.2 percent.

Bonds

The yield on 10-year Treasuries fell three basis points to 2.86 percent.

Germany’s 10-year yield dropped two basis points to 0.628 percent.

Britain’s 10-year yield declined two basis points at 1.474 percent.

Commodities

West Texas Intermediate crude fell 1.4 percent to $60.30 a barrel.

Gold dropped 0.3 percent at $1,322.05 an ounce.

— With assistance by Ven Ram, Eddie Van Der Walt, Kailey Leinz, and Sarah Ponczek

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