Wall Street wobbles after Powell's comments

Wall Street wobbles after Powell's comments

Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia, called Trump's proposed tariffs a "bombshell" announcement that might help the steel and aluminum industry but ultimately hurt USA stocks. The Federal Reserve earlier praised the benefits of trade, while the European Union has said it could respond in kind to any new tariffs.

Wall Street's main indexes fell on Thursday as industrial stocks, including heavyweights Boeing and Caterpillar, took a beating on fears that potential tariffs on steel imports could hit profits. The euro rose to $1.2275 from $1.2263.

The S&P 500 Index sank to session lows and fell below its 100-day moving average, while the Dow Jones Industrial Average dropped more than 500 points after the US president added to earlier confusion on the fate of proposed tariffs by announcing the levies in a meeting with industry executives.

Spot gold is expected to break support at US$1,317 per ounce and fall to the next support level at US$1,303, as suggested by its wave pattern and a projection analysis, Reuters technical analyst Wang Tao said.

The U.K.'s FTSE 100 Index decreased 0.8 percent.

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Indexes edged lower following Dudley's remarks, but investors said it was the tariff issue that drove the afternoon selloff.

By 13:09 p.m. ET, all the major sectors in the S&P 500 were down in response along with 29 of the 30 components of the Dow Industrial Average. "It would raise the price for items that use steel and aluminum".

"At this point, we have 4.1 percent unemployment".

Shares dropped $7.31, or 11.5 percent, to $56.08.

This year, the dollar index is still down 1.5 percent, pursued by suspicions that the Trump administration prefers a weaker dollar to fix its ballooning trade deficit.

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World stock markets entered March on shaky ground on Thursday, falling for the third straight day before the second leg of Federal Reserve chief Jerome Powell's testimony to politicians.

On Tuesday, Powell's testimony before a House committee left investors wondering if the Fed, which has signaled three rate hikes this year, may actually raise the interest rate four times.

Equity gains from here may be hindered by bond markets, with US 10-year yields close to the psychologically key 3 per cent level and up 17 basis points this month. Even with steady hiring and low firings, there's little sign yet of a sustained acceleration in worker pay, though previous Labor Department figures for January showed the biggest annual increase in average hourly earnings since 2009.

YIELDS: The yield on the 10-year Treasury note dipped to 2.85 percent from 2.86 percent late Wednesday.

Mexico's economy minister met with top USA trade officials on Wednesday midway through the latest push to renegotiate the North American Free Trade Agreement, as concerns about steel added to tensions between the two countries.

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"You could see earlier in the day when investors thought the president was going to have a listening session regarding tariffs the market went positive", Quincy Krosby, chief market strategist at Prudential Financial Inc., said by phone. AK Steel jumped 10 percent.

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