WASHINGTON (AFP) – Wall Street stocks slipped on Thursday after the United States (US) Federal Reserve sought to calm fears over President Donald Trump’s tariffs, while eurozone equities slumped.
Meanwhile, oil prices jumped and gold hit a new record high on continued geopolitical tensions — particularly concerning Gaza and Yemen – and fresh US sanctions on Iranian oil.
All three major indices on Wall Street closed lower, giving up some of their gains from Wednesday after Fed chair Jerome Powell suggested that any increase to consumer prices caused by tariffs would likely be short-lived.
“We started off in the red, went solidly into the green, only to go back into the red, then back into the green and now we’re kind of flatlining,” CFRA’s Sam Stovall told AFP, shortly before US markets slipped further to close in the red.
The major eurozone markets of Frankfurt, Milan and Paris gave up around one percent or more after European Central Bank chief Christine Lagarde warned a trade war between the US and Europe could shave half a percentage point off eurozone growth and push up inflation.
Lingering tariff fears and geopolitical developments helped safe-haven gold to another record above USD3,057.49 an ounce. The price of copper reached a five-month high above USD10,000 a tonne as US companies stock up on the metal targeted by Trump’s tariffs.
In other central bank action, the Bank of England and Sweden’s Riksbank held interest rates steady on Thursday, following in the footsteps of the Fed and the Bank of Japan a day earlier. Meanwhile, the Swiss central bank cut its rates on Thursday, citing “high uncertainty” in the global economy.
Nevertheless, most markets had their focus Thursday on the US, the world’s biggest economy.
“Great uncertainty remains over the direction of travel for the US economy, with business activity likely to remain subdued until we see greater clarity over the trade relationships and potential pricing for US imports and exports,” noted Scope Markets analyst Joshua Mahony.
Trump’s painful duties on imports into the US and threats of further tariffs have stoked recession fears.Policymakers expect inflation – excluding volatile food and energy prices – to hit 2.8 per cent this year, up from 2.5 per cent in its last forecast in December.
