Stocks fall, latest Trump tariff news weighs, dollar weakens

After the biggest jump since the 1990s, Bund has once again produced a higher advantage

Euro hits new 4-month high after ECB news

U.S. stocks fell sharply in afternoon trading

(Updated to US afternoon)

New York, March 6 (Reuters) –

Stock indexes have dropped sharply in volatile trading due to investors’ latest announcements to U.S. President Donald Trump, and the dollar has mitigated as investors’ risk aversion.

The global bond market sell-off continued, the second day after the rise in yields on the Bund in Germany in the 10 years since the 1990s.

The deal is intermittent and investors have evaluated Trump’s latest comments on tariffs.

Trump was exempted from Canada and Mexico for a month on Thursday under the North American trade agreement, away from his tariffs on 25% earlier this week, the latest twist in a rapid shift in trade policy that has whipped financial markets and business leaders.

He imposed 25% U.S. tariffs on imports from Mexico and Canada on Tuesday and imposed new tariffs on Chinese goods, which heightened concerns about the impact on inflation and growth.

“Trump is very confused by these tariffs,” said Tim Ghriskey, senior portfolio strategist at Ingalls & Snyder, New York.

“He did warn us that there would be some pain here at first and that the market doesn’t like pain,” he said.

Apart from the negative tone, chipmakers’ index fell after Marvell’s sales forecast failed to inspire investors.

The Dow Jones Industrial Average fell 467.34 points, or 1.09%, to 42,538.76, the S&P 500 fell 106.64 points, or 1.83%, to 5,735.99, and the Nasdaq composite fell 486.84 points, or 2.62%, or 2.62%, to 18,065.89.

MSCI’s global stock scale fell 8.70 points, or 1.01%, to 850.01. The Pan-European STOXX 600 index fell 0.03%.

To the yen, the dollar weakened by 0.77% to 147.74.

The single European currency rose 0.07% to $1.0797, after reaching another four-month high of $1.0854. The euro has had the largest weekly jump since May 2009.

The European Central Bank lowered expected interest rates and said monetary policy is getting less and less, and traders think it is another cut in April, which may not be given.

The 10-year German layman yield lasted 10 basis points, at 2.884%, up as high as 2.929% on Wednesday.

German lawmakers are expected to debate the €50 billion infrastructure fund and make comprehensive changes to state borrowing rules to fund the March 13 defense.

Japan’s 10-year government bond yields reached a height of nearly 16 years, while the benchmark US 10-year notes rose 1.7 basis points to 4.284%, from 4.267% late Wednesday.

Investors also evaluated the latest batch of economic data to show signs of economic signs ahead of Friday’s monthly U.S. salary report.

According to the Labor Department, initial U.S. unemployed claims fell 21,000 per week to a seasonally adjusted 221,000, lower than the expectations of Reuters’ 235,000 economists.

Comments from European leaders are also focused, saying they will support Ukraine and spend more on defense in a world where Trump’s policy reversal to the U.S. Trump suspended military aid to Keefe this week, which has raised concerns that the region no longer relies on U.S. protection since World War II.

(Reports by Caroline Veletkevitch; other reports by Marc Jones and Amanda Cooper; Editors by Chizu Nomiyama, Mark Heinrich, David Evans and Cynthia Osterman)