By Caroline Valetkevitch
NEW YORK (Reuters) -Major stock indexes cut losses and the Nasdaq turned positive Tuesday afternoon, while the euro rallied as German political parties agreed to a 500 billion euro infrastructure fund and after news that U.S. President Donald Trump’s administration and Ukraine plan to sign a minerals deal.
Reuters reported, citing people familiar with the situation, that Trump’s administration and Ukraine plan to sign the much-debated minerals deal following a disastrous Oval Office meeting Friday.
Meanwhile, Germany’s conservatives and Social Democrats announced proposals to set up a 500 billion euro fund for infrastructure and overhaul borrowing rules aimed at increasing defense spending.
The euro hit a three-month high of $1.0599. It was last up 1% at $1.0593. The euro was 0.4% higher against sterling.
Germany’s Bund futures turned sharply lower on the news on Germany, which came after the close of European markets. They were last down 1%.
German and European stock futures, which had fallen earlier in the day on U.S. tariff worries, rose. German Dax futures were last down 1.5% on the day after the benchmark Dax index closed down 3.5%.
Stock indexes including the S&P 500 were sharply lower earlier after the United States hit Canada, Mexico and China with steep tariffs, fueling investor worries about the impact on the economy.
Tariffs add to concerns about higher prices for consumers, said Jake Dollarhide, CEO of Longbow Asset Management in Tulsa, Oklahoma. “This economy has been driven by the consumer and saved by the consumer. This is about people’s grocery bills going up,” he said.
The Dow Jones Industrial Average fell 244.06 points, or 0.57%, to 42,945.28, the S&P 500 fell 10.27 points, or 0.19%, to 5,838.61 and the Nasdaq Composite rose 128.78 points, or 0.68%, to 18,478.97.
MSCI’s gauge of stocks across the globe fell 3.05 points, or 0.36%, to 852.76.
Trump’s new 25% tariffs on imports from Mexico and Canada and the doubling of duties on Chinese imports could rattle nearly $2.2 trillion in annual trade with the three largest trading partners of the U.S.
China immediately responded with 10%-15% tariffs on certain U.S. imports from March 10 and a series of new export restrictions for designated U.S. entities, while Canadian Prime Minister Justin Trudeau said Ottawa was launching 25% tariffs on C$30 billion ($20.72 billion) worth of U.S. imports.
The yield on benchmark U.S. 10-year notes rose 3.4 basis points to 4.214%, from 4.18% late on Monday.
(Reporting by Caroline Valetkevitch; Additional reporting by Alun John in London; Additional reporting by Iain Withers; Editing by Jan Harvey and Lisa Shumaker)
