Stocks lower but set for strong monthly gain despite tariff uncertainty

CNA

3 days ago

NEW YORK :Global stocks were down on Friday but were set to notch a weekly gain as well as the biggest monthly increase since late 2023 despite markets having been roiled by uncertainty over the Trump administration's tariff policies.
Sentiments were initially buoyed at the start of the week by signs of an easing of trade tensions between the U.S. and Europe, after President Donald Trump delayed planned tariffs on imports from the EU. Investor focus then shifted to earnings of artificial intelligence chipmaker Nvidia, which later reported better-than-expected results mid-week.
But markets were briefly shaken following an unexpected ruling by the U.S. Court of International Trade striking down Trump's so-called Liberation Day tariffs, triggering a court drama that saw an appellate court temporarily reinstate them.
"It's been quite a week," said Mark Malek, chief investment officer at SiebertNXT. "Within four days we got a compressed version of what we've had for the entire month, which is the tug of war between forces that drove markets higher last year and the prior year - that being AI and technology growth stocks - and then this looming challenge we have with all these administration tariffs."
On Wall Street, all three main indexes were trading lower on the session, dragged by weaknesses in technology, energy and materials stocks. They were, however, set to end the week and the month higher, with the benchmark S&P 500 index poised to snap three straight months of declines.
The Dow Jones Industrial Average fell 0.14 per cent to 42,155.39, the S&P 500 eased 0.33 per cent to 5,892.70 and the Nasdaq Composite shed 0.57 per cent to 19,065.61.
European shares were mostly higher and set for a weekly gain and to add 4 per cent for the month of May. MSCI's broadest index of Asia-Pacific shares outside Japan closed up 0.72 per cent overnight, ending the week lower but gaining nearly 5 per cent for the month.
MSCI's main world index was down 0.24 per cent to 878.15, but was on track to gain more than 1 per cent for the week and more than 5 per cent in May - making it the biggest monthly gain since November 2023.
Data showed on Friday that U.S. consumers had increased their spending marginally in April, and the closely-watched Personal Consumption Expenditures (PCE) Price Index rose 0.1 per cent last month, in line with expectations.
Trump and Fed Chair Jerome Powell had their first face-to-face meeting on Thursday. Afterwards a Fed statement said: "Powell did not discuss his expectations for monetary policy except to stress that the path of policy will depend entirely on incoming economic information and what that means for the outlook."
The yield on benchmark U.S. 10-year notes fell 1.2 basis points to 4.412 per cent. The 30-year bond yield fell 0.3 basis points to 4.9203 per cent.
The dollar was higher against major peers including the euro and on track for a monthly gain against the Japanese yen. The dollar weakened 0.01 per cent to 144.18 against the yen, while the euro was down 0.19 per cent at $1.1349.
The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, rose 0.18 per cent to 99.44. It was on track for the fifth straight month of losses, weighed down by tariff uncertainty.
Oil prices fell and were headed for a second consecutive weekly loss, as investors weigh a potentially larger OPEC+ output hike for July.
Brent crude futures fell 0.44 per cent to $63.87 a barrel. U.S. West Texas Intermediate crude fell 1.1 per cent to $60.27 a barrel.
Gold prices slipped as the dollar edged higher. Spot gold fell 0.78 per cent to $3,289.91 an ounce. U.S. gold futures slipped 0.93 per cent to $3,286.40 an ounce.