By Amanda Cooper and Koh Gui Qing
LONDON/NEW YORK (Reuters) -Global stocks steadied on Thursday, as a rally fuelled by Donald Trump’s spending plans for artificial intelligence infrastructure fizzled and caution set in over what the new U.S. president’s next moves on trade might be.
Weekly data showed the number of Americans filing for unemployment benefits rose a little more than expected in the most recent week, which dented the dollar and lifted stocks as it showed the labor market is strong.
The dominant factor for markets is what Trump plans to do about imposing tariffs. With no new details, the uncertainty weighed on equity markets while Treasury yields rose for a second day, as bond investors braced for an eventual imposition of tariffs that may stoke inflation. [US/]
“President Trump’s policies are creating the perfect storm of inflationary pressures,” said Nigel Green, CEO of deVere Group, a financial advisory firm, adding that another buildup in price pressures could cause the Federal Reserve to raise interest rates.
“The Fed may have no choice but to act. This could trigger significant market volatility,” Green said.
The MSCI index for global stocks was flat, while U.S. stocks were mixed. The S&P 500 edged up 0.1%, the Dow Jones Industrial Average added 0.4% and the Nasdaq Composite dipped 0.2%.
The U.S. 10-year Treasury yield climbed 5.7 basis points to 4.6558%, below last week’s 14-month high of 4.809%. [US/]
“Obviously, it’s early days … We have seen no surprises (from Trump) so far,” said Guy Miller, chief markets strategist at Zurich Insurance Group.
“If anything, some restraint was shown. So, that has allowed the financial markets to reprice to some extent, allowing bond yields to come back in again and risk assets to move higher,” he said.
In Europe, the STOXX 600, which hit a record high on Wednesday, edged up 0.3%, as some selling pressure abated on technology shares, which had soared after Trump announced a $500-billion private-sector AI infrastructure investment plan.
The joint venture, which involves Oracle, OpenAI and SoftBank, initially turbo-charged a rally in global stock markets, which drew further support from upbeat earnings.
On Asian markets overnight, Japan’s Nikkei gained 0.8%. Shares in SoftBank jumped 5%.
In China, the government announced plans to channel hundreds of billions of yuan of investment from state-owned insurers into shares, just after Trump said he was proposing to slap a 10% punitive duty on Chinese imports.
The CSI300 blue-chip index ended the day up 0.18%, while the yuan weakened against the dollar to 7.289 in offshore trading.
