The Australian sharemarket is set to rise, with futures at 6.55am AEDT pointing to a gain of 42 points, or 0.2 per cent, at the open. The ASX added 0.1 per cent on Wednesday. The futures were set before Trumpโs announcement.
Elon Muskโs Tesla helped knock the market around after initially falling more than 6 per cent following a report that it delivered fewer electric vehicles in the first three months of the year than it did in last yearโs first quarter.
Tesla is one of Wall Streetโs most influential stocks because of its immense size, and itโs faced backlash due to anger about CEO Elon Muskโs leading the US governmentโs efforts to cut spending. But its stock erased its loss from the morning and ended with a gain of 5.3 per cent following a report from Politico that Trump has told others that Musk will step back from his government role in coming weeks.
Financial markets around the world have broadly been shaky lately because of uncertainty about Trumpโs trade war. He has said he wants tariffs to make the global system more fair and to bring manufacturing jobs back to the United States from other countries. But tariffs also threaten to grind down growth for the US and other economies, while worsening inflation when it may be stuck above the Federal Reserveโs 2 per cent target.
One of the hopes thatโs helped push upward on the US stock market recently is the possibility that at least the worst of the uncertainty around tariffs may be passing.
โWe do not know how long the previously enacted tariffs and any future tariffs will remain in force, but we believe peak tariff uncertainty may soon be behind us,โ according to Kurt Reiman, head of fixed income Americas, and other strategists at UBS Global Wealth Management. โMuch of the work the administration set out to achieve will have been put in place, and there are numerous potential offramps available.โ
Before Liberation Day, Trump had already announced 25 per cent tariffs on auto imports; levies against China, Canada and Mexico; and expanded tariffs on steel and aluminum. Trump has also put tariffs against countries that import oil from Venezuela and plans separate import taxes on pharmaceutical drugs, lumber, copper and computer chips.
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But even if Trumpโs tariffs ultimately end up being less harsh than feared, a worry hitting the market is that their herky-jerky rollout may by itself create enough nervousness to get US households and businesses to freeze their spending, which would damage the economy.
Surveys have shown deepening pessimism, but economists are waiting to see if that translates into actual damage for the economy. A report on Wednesday suggested the US job market may still be running stronger than expected.
The report from ADP Research said employers, excluding the government, accelerated their hiring last month by more than economists estimated. It could be an encouraging signal for the more comprehensive jobs report coming Friday from the US government. Economists expect that to show overall hiring slowed in March from February.
The job market has been one of the linchpins keeping the US economy out of a recession.
Treasury yields swung in the bond market, echoing the indecision seen in the stock market.
The yield on the 10-year Treasury fell as low as 4.11 per cent in the morning from 4.17 per cent late Tuesday and from roughly 4.80 per cent early this year. But it later rose to 4.18 per cent. Higher yields can indicate higher expectations for the economy or for inflation.
On Wall Street, Newsmax fell 77.5 per cent in its third day of trading to give back some of the meteoric gains from its debut at the start of the week. It surged 735 per cent Monday and then another 179 per cent on Tuesday.
Several airlines, meanwhile, flew higher to recover some of the sharp losses taken recently on worries that tariff-weary customers will fly less. United Airlines climbed 4.6 per cent.
All told, the S&P 500 rose 37.90 points to 5,670.97. The Dow Jones Industrial Average added 235.36 to 42,225.32, and the Nasdaq composite climbed 151.16 to 17,601.05.
In stock markets abroad, indexes were mixed across Europe after finishing mixed in Asia.
AP, Reuters
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