Berliner Boersenzeitung - Global stocks drop ahead of Trump auto tariff announcement

In New York, all three major indices closed lower, while the CBOE Volatility Index -- Wall Street's so-called "fear gauge" -- jumped seven percent, reflecting market jitters.

"It's the continuation of worries regarding the tariffs and the impact on the economy," Peter Cardillo from Spartan Capital Securities told AFP.

In Europe, Paris and Frankfurt closed down while London edged up as data showed an unexpected slowdown to UK annual inflation.

- Incoming auto tariffs -

With the White House's so-called "Liberation Day" on April 2 fast approaching, investors are bracing for a wave of sweeping levies on imports amid warnings of crippled global trade, a fresh spike in inflation, and even a possible recession.

Trump has alternated between tough talk about imposing tariffs across the board to suggesting he may allow some carve-outs to spare US consumers the full brunt of their impact on prices.

The result has been a drop in economic sentiment as consumers expect higher prices.

"All the tariff talk uncertainty has led to a sharp drop in confidence," said Trade Nation analyst David Morrison.

On Wednesday, White House Press Secretary Karoline Leavitt said that Trump would unveil new tariffs on the auto industry at 4:00 pm local time in Washington (2000 GMT), setting off a sell-off in the stocks of several firms, including General Motors and Tesla.

Trump's tariff plans have hit consumer sentiment hard, with the Conference Board reporting Tuesday that its closely-watched gauge of consumer confidence dived to its lowest level since 2021 as concerns grow about higher prices.

"Recent survey data has painted a gloomy outlook for the US economy," Morrison said. "But this pessimism has yet to show up in hard data, such as unemployment, while corporate earnings continue to beat expectations."

- Defense stocks rise -

While most European markets fell, defense stocks bucked the trend, as one country after another has pledged to boost military spending, with Spain and Sweden being the latest to do so Wednesday.

France's Thales, Germany's Rheinmetall and Italy's Leonardo all rose.

London's stock market closed up on the news that Britain's annual consumer inflation slowed to 2.8 percent in February from 3.0 percent a month earlier.

The market held onto its gains even after the British government's financial watchdog halved the country's growth forecast for 2025, while raising it for the next three years.

Trump's talk of tariff exemptions had earlier helped some Asian markets edge higher after recent slumps.

Copper futures traded on New York's Comex exchange touched a record high after Trump said he could impose duties on imports of the commodity within weeks, leading some investors to shift supply to the United States to avoid any eventual levies.

- Key figures around 2020 GMT -

New York - Dow: DOWN 0.3 percent at 42,454.79 points (close)

New York - S&P 500: DOWN 1.1 percent at 5,712.20 (close)

New York - Nasdaq Composite: DOWN 2.0 percent at 17,899.02 (close)

London - FTSE 100: UP 0.3 percent at 8,689.59 (close)

Paris - CAC 40: DOWN 1.0 percent at 8,030.68 (close)

Frankfurt - DAX: DOWN 1.2 percent at 22,839.03 (close)

Tokyo - Nikkei 225: UP 0.7 percent at 38,027.29 (close)

Hong Kong - Hang Seng Index: UP 0.6 percent at 23,483.32 (close)

Shanghai - Composite: DOWN less than 0.1 percent at 3,368.70 (close)

Euro/dollar: DOWN at 1.0757 from $1.0790 on Tuesday

Pound/dollar: DOWN at $1.2891 from $1.2943

Dollar/yen: UP at 150.54 yen from 149.90 yen

Euro/pound: UP at 83.41 pence from 83.37 pence

Brent North Sea Crude: UP 1.1 percent at $73.79 per barrel

West Texas Intermediate: UP 0.9 percent at $69.65 per barrel

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(G.Gruner--BBZ)