SINGAPORE: Global stocks were steady on Wednesday, with European and US shares at record highs, as traders cautiously shrugged off US President Donald Trump’s latest tariff threats on auto, semiconductor and pharmaceutical imports.
Since Trump’s inauguration four weeks ago, he has imposed a 10 per cent tariff on all imports from China, on top of existing levies. He has also announced, and delayed for a month, 25 per cent tariffs on goods from Mexico and non-energy imports from Canada.
Trump told reporters on Tuesday that sectoral tariffs on pharmaceuticals and semiconductor chips would start at “25 per cent or higher”, rising substantially over the course of a year. He intends to impose similar tariffs on autos as soon as April 2.
But the market reaction to Trump’s threats was muted as investors increasingly see them as bargaining tools, although the US dollar was on the front foot as geopolitical worries, including tense Russia-Ukraine negotiations boosted safe-haven flows.
“I think investors assume that deals will be done and that tariffs will be delayed and reduced,” said Ben Bennett, Asia-Pacific investment strategist at Legal & General Investment Management in Hong Kong.
“I’m worried that the disruption and uncertainty caused by such headlines is underestimated. At the margin, this could delay business investment and hiring decisions… but that’s not how most investors are thinking it seems.”
European futures pointed to a muted open after the benchmark stock index closed at a record high on Tuesday, taking its 2025 gains to 10 per cent, far outperforming the S&P 500 and the Nasdaq
UK stocks futures were little changed ahead of inflation data that will likely highlight why the Bank of England has been has been cautious about cutting interest rates despite a weak overall economy.
In Asia, the focus has been on Chinese tech stocks , which have been on a tear recently as the emergence of AI startup DeepSeek and a meeting between Xi Jinping and business leaders in the sector lifted sentiment.
“Green shoots are emerging in China’s economy and DeepSeek is injecting a shot of adrenaline into the sector,” said Thomas Rupf, co-head Singapore and CIO Asia at VP Bank.
“While trade risks persist, tech optimism remains strong as the prospect of low-cost AI applications drives a reassessment of growth potential.”
Hong Kong’s Hang Seng Index fell 0.4 per cent as investors pocketed some profits. The index has risen 14 per cent so far in 2025, jostling with Germany’s DAX index for best-performing market in the world.
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The New Zealand dollar was 0.3 per cent higher at US$0.5722 after the central bank slashed interest rates by 50 basis points to 3.75 per cent as expected but hinted its aggressive cuts were set to slow.
The Australian dollar eased 0.11 per cent to US$0.6347 a day after the central bank delivered its first rate cut since 2020, but cautioned about the prospects for further easing.
Overnight, the US benchmark S&P 500 squeaked past its previous record closing high as all three Wall Street indexes seesawed between gains and losses for much of the session before rising in the closing minutes.
European leaders vowed to step up support for Ukraine as the US and Russia held bilateral talks on the war this week. Investors also hope this weekend’s German election will lead to economic stimulus.
Minutes from the US Fed’s January meeting, when the central bank held borrowing costs at 4.25 per cent to 4.5 per cent, are due later on Wednesday. That follows hawkish comments from Fed Chair Jerome Powell in testimony to Congress last week and hot consumer price data.
Brent crude oil rose 0.28 per cent to US$76.05 a barrel as traders awaited the outcome of the US-Russia talks in Riyadh.
Spot gold eased a bit to US$2,932 an ounce, after hitting a record high last week on safe haven demand.
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