U.S., European shares strengthen after Trump auto-tariff delay

NEW YORK (Reuters) – U.S. and European stock indexes erased losses and turned positive on Wednesday after news that U.S. President Donald Trump planned to delay tariffs on auto imports, outweighing earlier pressure on equities and government bond yields caused by weak U.S. and Chinese economic data.

FILE PHOTO: The London Stock Exchange Group offices are seen in the City of London, Britain, December 29, 2017. REUTERS/Toby Melville/File Photo

Trump is expected to delay a decision on tariffs on imported cars and parts by up to six months, three administration officials told Reuters. Fears about an escalating global trade war, particularly following a spike in U.S.-China tensions, have rattled markets over the past week.

“Europe is on the brink of recession, and auto tariffs would almost certainly push it into recession,” said Oliver Pursche, chief market strategist at Bruderman Asset Management in New York. “President Trump announcing that he’d delay auto tariffs by as many as six months is positive, and stocks are reacting appropriately to that.”

Major U.S. and European stock indexes moved higher after falling earlier.

On Wall Street, the Dow Jones Industrial Average rose 41.48 points, or 0.16%, to 25,573.53, the S&P 500 gained 9.17 points, or 0.32%, to 2,843.58 and the Nasdaq Composite added 55.34 points, or 0.72%, to 7,789.83.

The pan-European STOXX 600 index rose 0.27%. Europe’s auto’s and suppliers index jumped 1.5%.

Italian stocks were still down 0.3% after the country’s deputy prime minister said Rome was ready to break EU fiscal rules.

MSCI’s gauge of stocks across the globe gained 0.33%.

The positive trade developments lifted risk sentiment that had been dampened earlier in the session by weak economic data.

China reported surprisingly weaker growth in retail sales and industrial output for April. In the U.S., retail sales

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