Global Stocks Rise Amidst Trade Uncertainty and Cooler Inflation Data

Global Stocks Rise Amidst Trade Uncertainty

Global stock markets experienced a volatile trading day on Wednesday, March 12th, 2023. While the US Consumer Price Index (CPI) came in lower than expected, indicating a cooling inflation, concerns surrounding US President Donald Trump's tariff policies and their potential impact on the global economy continued to weigh on investor sentiment.

The S&P 500 initially opened higher but then pared gains before regaining some lost ground later in the day. Investors were relieved by the lower-than-expected inflation data, but remained wary of the potential inflationary impact of tariffs.

Meanwhile, the Dow Jones Industrial Average rose 0.26%, the S&P 500 gained 0.93%, and the Nasdaq Composite climbed 1.58%.

In Europe, the pan-European STOXX 600 index closed up 0.81% after four straight sessions of declines. This rebound was attributed to optimism surrounding a potential ceasefire between Ukraine and Russia, as well as the cooler-than-expected US inflation report.

Treasury yields rose despite concerns about tariffs offsetting optimism about cooling inflation. The yield on benchmark US 10-year notes rose 2.8 basis points to 4.316%, while the 2-year note yield rose 5.6 basis points to 3.997%.

In currencies, the US dollar performance was mixed. While the euro was down 0.3% against the US dollar, it strengthened against the Japanese yen and the Swiss franc. The Canadian dollar also strengthened against the greenback.

Oil prices rose as US government data showed tighter oil and fuel inventories than expected. US crude settled up 2.16% at US$67.68 a barrel, while Brent settled at $70.95 per barrel.

Safe-haven gold rose, aided by tariff uncertainty and the cooler US inflation report. Spot gold rose 0.64% to US$2,935.02 an ounce.