BANGKOK (AP) — European shares opened mostly lower and U.S. futures dropped more than 1% on Thursday after most Asian markets ended the day with gains.
Selling pressure kicked in after Wall Street's rally, which was spurred by President Donald Trump’s decision to give a one-month exemption for U.S. automakers on his 25% tariffs for Mexican and Canadian imports. That raised hopes he may avoid a worst-case trade war that grinds down economies and sends inflation higher.
Germany's DAX gained 0.5% to 23,194.03 and the CAC 40 in Paris lost 0.5% to 8,135.30. Britain's FTSE 100 sank 1% to 8,670.99.
The future for the S&P 500 was down 1.2% and that for the Dow Jones Industrial Average was 1% lower.
In Asian trading, Tokyo's Nikkei 225 index gained 0.8% to 37,704.93. Japanese automakers' shares surged in U.S. trading, though Toyota Motor Corp.'s shares fell back in Tokyo trading. losing 1%. Honda Motor Corp. gained 2% and Nissan Motor Co. rose 1.1%.
Hong Kong's Hang Seng index jumped 3.3% to 24,369.71 following Chinese government reports to the annual legislative session that showed a greater resolve by Beijing to boost consumer spending and other domestic demand.
The Shanghai Composite index advanced 1.2% to 3,381.10.
South Korea's Kospi jumped 0.7% to 2,576.16, while the S&P/ASX 200 in Australia slipped 0.6% to 8,094.70.
Taiwan's Taiex shed 0.7%, while the SET in Bangkok skidded 1.4%.
On Wednesday, gains for Ford Motor and GM stocks helped lead Wall Street higher.
The S&P 500 rose 1.1%, while the Dow added 1.3%. The Nasdaq composite advanced 1.6%.
Trump said he was granting a one-month exemption for U.S. automakers on his 25% tariffs for Mexican and Canadian imports after talking with Ford, General Motors and Stellantis, which owns Chrysler. That sent relief through Wall Street, and Ford's and General Motors' stock both jumped more than 5% to help lead a widespread rally across the market.
Trump did not roll back all of the tariffs he announced on the United States' largest trading partners, including on China. He said in an address before Congress Tuesday night that he’s going ahead with additional tariffs on track to go into effect on April 2.
He has upped uncertainty in markets already reeling after he said Monday that there was no more room for negotiations. The higher tariffs effect Tuesday, causing the U.S. stock market to tumble.
Whatever the outcome, just the threat of tariffs has hit U.S. households and businesses, with consumer confidence souring sharply because of expectations they will fuel inflation. With all the changes coming from Washington, U.S. manufacturers say their growth is approaching stall-speed amid worries about tariffs.
A recent stream of weaker-than-expected reports on the U.S. economy has raised the possibility of a worst-case scenario known as “stagflation.” It's something that doesn’t happen often, where the economy is stagnating and inflation is high.
The U.S. economy closed out last year running at a solid pace. If it weakens, the Fed can cut its main interest rate to make borrowing easier and goose growth. But rate cuts push inflation higher. It could be boxed in if prices for eggs and other everyday items surge because of tariffs.
In other dealings early Thursday, U.S. benchmark crude oil added 2 cents to $66.33 per barrel, while Brent crude, the international standard, was up 2 cents, to $69.32 per barrel.
The U.S. dollar fell to 147.90 Japanese yen from 148.89 yen. The euro fell to $1.0789 from $1.0790.
Elaine Kurtenbach, The Associated Press
