Stocks waver as ECB cuts rate, Trump slams Fed chief.

Stock markets wavered Thursday as the European Central Bank cut interest rates and Donald Trump slammed Federal Reserve chief Jerome Powell, who warned that the US president’s tariffs would likely fuel inflation.

Wall Street’s tech-heavy Nasdaq index and the broad-based S&P 500 opened higher, a day after Powell’s comments contributed to another market slump.

The Dow, however, extended its losses in early deals.

Powell warned on Wednesday that Trump’s sweeping tariffs were “highly likely to generate at least a temporary rise in inflation”.

He said it could put the US central bank in the unenviable position of having to choose between tackling inflation and unemployment.

Trump hit back Thursday, slamming Powell for not lowering interest rates as the ECB has done and saying his “termination cannot come fast enough”.

“All-in-all, the trade news and Powell’s comments provided a tough backdrop for the market,” said a Deutsche Bank analyst note.

The ECB, meanwhile, cut rates for the sixth consecutive time as it warned that “the outlook for growth has deteriorated owing to rising trade tensions”.

ECB President Christine Lagarde, however, said the tariffs’ impact on inflation would only get “clearer over time”.

Trump imposed 10% tariffs on all imports this month, though he suspended higher duties on dozens of nations for 90 days.

He has also placed 25% levies on steel, aluminium and cars.

Investors found solace in Trump declaring “Big Progress!” in tariff negotiations with Japan.

Tokyo’s envoy Ryosei Akazawa said: “I understand that the US wants to make a deal within the 90 days. For our part, we want to do it as soon as possible.”

Tokyo led Asian stocks higher.

With Japanese companies being the biggest investors in the United States, Tokyo’s negotiations are of particular interest to markets.

While Japan’s Prime Minister Shigeru Ishiba warned that the talks “won’t be easy”, he said the president had “expressed his desire to give the negotiations… the highest priority”.

Elsewhere, safe-haven investment gold hit a fresh record above $3,357.78 an ounce before paring back gains, while the dollar and oil prices firmed.

Hopes that Trump’s blistering tariffs could be pared back have helped temper some of the disquiet on markets after a rout at the start of the month, fuelled by talk of a global recession and an upending of historic trading norms.

“But don’t get carried away — the market remains jittery,” said Fawad Razaqzada, market analyst at City Index and Forex.com

Source: https://sg.finance.yahoo.com/news/asian-markets-boosted-big-progress-032354358.html