Global stocks advanced on Friday with U.S. Treasury yields declining, fueled by weak U.S. data and new tariff announcements. The Commerce Department reported a significant 0.9% decrease last month, hinting at consumer spending constraints due to rising prices and tariff uncertainties. Similarly, data from the Federal Reserve reflected a 0.1% decrease in factory output last month, primarily influenced by decreased motor vehicle production.
President Donald Trump instructed his economic team to explore reciprocal tariffs on countries taxing U.S. imports, increasing the specter of a global trade conflict. Despite this, investors monitored the Munich Security Conference where Vice President JD Washington was expected to engage in discussions regarding a potential Russia-Ukraine ceasefire, potentially bolstering European growth.
As per Vassili Serebriakov, an FX strategist at UBS in New York, “Markets are still hoping that tariff headwinds are not going to be as significant as perhaps previously feared.” On Wall Street, stocks rallied, driven by the energy sector, while the S&P 500 index edged closer to its January record peak.
Forecasts of a 25 basis points Federal Reserve rate cut in June have risen to 51.4%. MSCI's global stock index climbed 0.26%, set for a fourth weekly gain in five. Despite the STOXX 600 index's 0.29% dip, the European markets continued their eight-week winning streak.
The dollar index dropped by 0.43%, with the euro and yen strengthening against the greenback. U.S. 10-year Treasury yields fell by 6.4 basis points to 4.461% but were poised for a weekly increase.
Oil prices fluctuated with U.S. crude dropping to $71.02 a barrel, and Brent crude to $74.96 per barrel.