Long-term yields soar after auto tariffs, curve steepens

NEW YORK – US Treasury long-term yields rose to their highest levels in over a month on Thursday as investors weighed the inflationary impact of President Donald Trump’s latest tariff moves alongside fresh data showing continued economic resilience.

Trump unveiled late on Wednesday his plan to implement 25% tariffs on imported cars and light trucks effective next week, while the duties on auto parts are expected to begin from May 3. Investors are also bracing for a wave of reciprocal tariffs he plans to unveil next week, though the US president has hinted there may be room for flexibility in the final policy.

Meanwhile, in a sign the labor market is holding up, the number of Americans filing new applications for unemployment benefits slipped last week, while the jobless rate appeared to have held steady in March, Labor Department data showed on Thursday.

That data followed other strong readings earlier this week, including the services sector in S&P’s PMI index for March and the durable goods orders report for February, which were both stronger than anticipated.

“Yields are starting to feel a bit of a trend here as US economic data is coming in better than expectations,” said Matthew Miskin, co-chief investment strategist at John Hancock Investment Management. “Maybe there is a bit of an inflation input priced in, but growth isn’t as bad as we thought.”

Treasury yields, which move inversely to prices, declined marginally after the release of fourth-quarter gross domestic product growth data.

While the headline figure was revised to 2.4%, higher than the consensus estimate of 2.3% in a Reuters poll, the data also showed consumer spending growth in the last three months of 2024 was revised lower by two-tenths of a percentage point to 4%. An analyst at BMO Capital Markets said in a note that the specifics within the fourth-quarter economic growth data were likely to tilt first-quarter GDP estimates lower.

But for the time being, the overall economic picture remained encouraging, said Ryan O’Malley, head of portfolio management at Ducenta Squared Asset Management.

“The economy is still growing at a fairly steady pace, inflation is still above target but growth remains positive,” he said.

Benchmark 10-year yields were last at about 4.371%, over three basis points higher than on Wednesday. They earlier hit an intra-day high of 4.4% – the highest level since February 24. Two-year yields, which more closely reflect market expectations for changes in monetary policy, were last at 4%, roughly one basis point lower on the day.

That meant the closely watched yield curve that plots the premium of 10-year yields over two-year yields widened to about 37 basis points, the widest since mid-January. The so-called bear steepening of the curve, bad for long-term bond prices, indicates the market expects interest rates to remain high due to ongoing resilience in the economy.

Longer-dated 30-year yields touched a high of 4.755%, the highest level since February 20.

The breakeven rate on five-year US Treasury Inflation-Protected Securities (TIPS) was last at 2.65%, versus 2.61% on Wednesday. The 10-year TIPS breakeven rate was last at 2.39%, up from 2.38% on Wednesday, indicating the market sees inflation averaging about 2.39% a year for the next decade.

On the supply side, the Treasury sold USD 44 billion seven-year notes on Thursday with a high yield of 4.233%, slightly higher than the market at the time of bidding, which suggests investors demanded higher compensation to absorb the issuance.

A two-year note sale on Tuesday was well-received, while a five-year note issuance on Wednesday also met lukewarm demand.

(Reporting by Davide Barbuscia; Editing by Paul Simao and Deepa Babington)

Hedge funds short Nvidia, Tesla and AMD, Morgan Stanley says

NEW YORK – Hedge funds are increasingly betting against stocks, with Nvidia, Advanced Micro Devices, and Tesla as their top three shorts placed on Wednesday, a Morgan Stanley note showed on Thursday.

Wednesday was the third largest day of single stock selling by hedge funds this year, according to the bank’s institutional equity division, led by the technology sector.

Hedge funds mostly added short positions, or bets that stock prices will fall, to their portfolios, although they also slightly trimmed long exposures, Morgan Stanley added.

The hedge funds’ move illustrates how hedge funds are becoming more bearish about the stock market after back-to-back years of gains of over 20% in the S&P 500. The index is down 2.6% this year, as concerns about US trade policy weigh.

Their targeted short bets on companies such as Nvidia and Tesla also underscore hedge funds seeing at least some of the once popular Magnificent Seven shares of the biggest US tech firms as expensive.

Except for Meta Platforms, shares in all other Mag-stocks are underperforming the S&P, with Elon Musk’s carmaker Tesla down over 31% this year, while Nvidia fell more than 16%. AMD, which is not part of that group, is down over 12%.

Still, Morgan Stanley showed funds unwound short bets on Apple and Alphabet on Wednesday.

Data analytics firm Ortex showed that overall short interest in the Magnificent Seven has picked up, although it remains lower than at the beginning of the year.

On Tuesday, short interest in the Magnificent Seven rose 8%, to 1.19%, to slightly retreat in the following day, according to Ortex. The uptick was mostly driven by additional bearish bets on Tesla, in which short interest is close to 3%.

Data from the European Automobile Manufacturers Association (ACEA) showed on Tuesday that Tesla’s market share in Europe continued to shrink in February as its sales dropped. Still, shares rose 3.45% on that day.

Hedge funds’ bearishness is not only concentrated in the United States. Portfolio managers net sold European construction materials-focused companies, as well as financials and energy.

(Reporting by Carolina Mandl in New York; Editing by Alison Williams, William Maclean)

Gold hits record high as US tariffs spark trade tensions

Gold scaled a record peak on Thursday, as investors sought the safe-haven asset in response to escalating global trade tensions and tumbling equity markets, following US President Donald Trump’s announcement of new auto tariffs.

Spot gold climbed 1% to USD 3,050.32 an ounce as of 01:40 p.m. ET (1740 GMT) after hitting an all-time high of USD 3059.30. Bullion has hit 17 record highs this year.

US gold futures climbed 1.3% to settle at USD 3,061, also hitting an all-time high of USD 3,071.30 earlier in the session.

“Looks like we’re going to see (gold futures hit) USD 3,100 here shortly, and the main catalyst is safe-haven buying,” driven by uncertainty around Trump’s tariff plans, said Bob Haberkorn, senior market strategist at RJO Futures.

Governments from Ottawa to Paris threatened retaliation after Trump unveiled a 25% tariff on imported vehicles, set to come into effect the day after he plans to announce reciprocal tariffs, aimed at the countries he says are responsible for the bulk of the US trade deficit.

Global stock markets fell as shares in some of the world’s biggest carmakers tumbled.

Gold is also seeing support from strong central bank inflows and ETF demand, said Phillip Streible, chief market strategist at Blue Line Futures.

Investors are now awaiting the US Personal Consumption Expenditures data due on Friday to gauge the trajectory for further rate cuts, after the Federal Reserve’s decision last week to hold its benchmark interest rate steady.

Gold is traditionally seen as a hedge against economic and political uncertainty and often thrives in a low-interest rate environment.

Goldman Sachs on Wednesday raised its end-2025 gold price forecast to USD 3,300 per ounce from USD 3,100, citing stronger-than-expected ETF inflows and sustained central bank demand.

Spot silver rose 1.7% to USD 34.27 an ounce after hitting their highest level since October 2024 earlier in the session.

Platinum was up 0.7% at USD 981 per ounce, and palladium added 0.3% to USD 971.25.

(Reporting by Anmol Choubey in Bengaluru; Editing by Shailesh Kuber, Maju Samuel, and Vijay Kishore)

Gold slips as dollar, Treasury yields tick higher

Gold prices eased on Wednesday as the dollar and US bond yields climbed, although concerns over the Trump administration’s fresh tariffs kept prices above the USD 3,000 per ounce level.

Spot gold was down 0.1% at USD 3,016.71 an ounce at 1:30 p.m. ET (1730 GMT). US gold futures settled 0.1% lower at USD 3,022.50.

The dollar index rose 0.4% against its rivals, making gold more expensive for other currency holders, while benchmark 10-year US Treasury yields inched higher.

“Gold remains underpinned by haven interest amid ongoing tariff uncertainties and geopolitical risks. Fresh record highs would bode well for the attainment of my next upside target at USD 3,150,” said Peter Grant, vice president and senior metals strategist at Zaner Metals.

US President Donald Trump said on Monday that automobile tariffs are coming soon, but indicated that not all of his threatened levies would be imposed on April 2 and some countries may get breaks.

“If the tariffs are not as serious as people are thinking, we could see a correction (in gold),” said Marex analyst Edward Meir.

Investors worried that Trump’s tariffs would stoke inflation and hinder economic growth are taking refuge in safe-haven assets like gold.

Gold, traditionally seen as a hedge against uncertainty and inflation, has risen more than 15% this year and hit an all-time peak of USD 3,057.21 on March 20.

Market participants now look forward to US personal consumption expenditures data due on Friday that could shed more light on US rate cut path.

“Tame PCE inflation would reinforce those dovish leanings and provide ongoing lift for gold,” Grant said.

The Federal Reserve held its benchmark interest rate steady last week but indicated it could cut rates later this year. Non-yielding bullion tends to thrive in a low interest-rate environment.

Minneapolis Fed Bank President Neel Kashkari said that while the US central bank has made a lot of progress bringing inflation down, “we have more work to do” to get inflation to the Fed’s 2% target.

Elsewhere, spot silver fell 0.3% to USD 33.63 an ounce, while platinum was down 0.1% to USD 975.17. Palladium rose 1% to USD 965.98.

(Reporting by Brijesh Patel and Anmol Choubey in Bengaluru, additional reporting by Ishaan Arora; Editing by Alexandra Hudson, Maju Samuel, and Vijay Kishore)

Oil settles up 1% on US crude and fuel stock draw, Venezuela supply worries

HOUSTON – Oil prices rose on Wednesday, buoyed by government data showing US crude oil and fuel inventories fell last week and by mounting concerns about tighter global supply following the US threat of tariffs on nations buying Venezuelan crude.

Brent crude futures settled up 77 cents, or 1.05%, at USD 73.79 a barrel. US West Texas Intermediate crude futures settled up 65 cents, or 0.94%, at USD 69.65 a barrel.

At their session highs, both benchmarks were up more than USD 1 a barrel.

US crude oil inventories fell last week as refiners kept ramping up production, while gasoline and distillate stockpiles also dropped, the Energy Information Administration said.

Crude inventories fell by 3.3 million barrels to 433.6 million barrels in the week ended March 21, the EIA said, a deeper draw than the 956,000 barrels that analysts had expected in a Reuters poll.

On Tuesday, trade in Venezuelan oil to top buyer China stalled after US President Donald Trump threatened tariffs on countries buying from Caracas. Days earlier, US sanctions targeted China’s imports from Iran.

On Monday, Trump signed an executive order authorizing blanket 25% tariffs on imports from any country that buys Venezuelan crude oil and liquid fuels.

“There is concern in the market about touching that oil so we could lose that supply,” said John Kilduff, partner at Again Capital LLC in New York.

“The discount on Venezuela’s exports could go up to 35%, and difficulties in commercialization could generate bottlenecks that could lead to production shutdowns amounting up to 400,000 barrels per day, more than half of Venezuela’s exports,” said Barclays analysts in a note.

Venezuela could potentially lose USD 4.9 billion in revenue, or over 10% of GDP, the analysts said. Oil is Venezuela’s main export, and China is already a target of US import tariffs.

Chinese traders and refiners said they were waiting to see whether Beijing would direct them to stop buying.

“Physical markets are tightening as flows are shifted due to the raft of US sanctions,” said Ashley Kelty, analyst at Panmure Liberum.

Last week, Washington imposed a new round of sanctions on Iran’s oil sales, targeting entities including Shouguang Luqing Petrochemical, an independent refinery in China’s Shandong province, and vessels that supplied oil to such plants.

“OPEC+ may be ramping up production in anticipation of potential US sanctions, helping to offset a loss of up to 1.5 million bpd of Iranian exports without destabilizing global oil prices,” said Jorge Leon, head of geopolitical analysis at Rystad Energy.

Capping oil price gains, the US reached deals with Ukraine and Russia to pause attacks at sea and against energy targets, with Washington agreeing to push to lift some sanctions against Moscow. This offset some price support from the Venezuela situation, Capital’s Kilduff said, adding he expected to see more Russian supply on the market.

“Both China and India will likely turn to buy more Russian-sanctioned crude oil instead of more closely monitored and riskier Venezuelan crude,” said StoneX analyst Alex Hodes.

Kyiv and Moscow both said they would rely on Washington to enforce the deals, while expressing skepticism about the other side.

(Reporting by Georgina McCartney in Houston, Arunima Kumar in Bengaluru, Stephanie Kelly in New York, and Siyi Liu in Singapore; Editing by Sonali Paul, Kim Coghill, Jan Harvey, David Gregorio, and Nia Williams)

Yields inch higher on tariff exemption hopes, patient Fed

NEW YORK – US Treasury yields inched higher on Wednesday as investors weighed potential exemptions from US President Donald Trump’s tariffs and Federal Reserve officials signaled a patient approach to interest rate cuts.

Trump indicated on Monday that not all of his threatened levies would be imposed on April 2 and some countries may get breaks. This has given some reprieve this week to investors rattled by the expected inflationary impact and hit on US growth from aggressive US trade policies.

Still, uncertainty around US import levies gripped markets again on Wednesday as Trump prepared to announce tariffs on the auto industry later in the day.

“This psychological churn is, I expect, what we’ll see at least until that April 2 date, but probably even beyond, because there’s so many moving parts. We have all the macro data and we have all the tariffs uncertainty,” said Mark Hackett, chief market strategist at Nationwide.

Yields, which move inversely to prices and tend to rise on expectations of higher growth and inflation, edged higher, with the benchmark 10-year yields last at 4.34%, up 3-1/2 basis points from Tuesday. Two-year yields were last at 4.01%, one basis point higher.

St. Louis Fed President Alberto Musalem said on Wednesday the Fed had no urgency to cut rates given ongoing growth, and cautioned that tariffs could trigger more persistent price pressures. Minneapolis Fed President Neel Kashkari said the Fed should stay put amid continued policy uncertainty and the effect of tariffs on the economy.

“Markets are still trying to unpack … the fear of higher inflation related to potential tariffs, but the Fed is seemingly remaining patient because the data is not showing that high inflation yet, even though there’s so many expectations for it,” said Joe Bell, chief investment officer at Meeder Investment Management.

On the economic data front, the February reading of durable goods orders, released by the US Commerce Department on Wednesday, was stronger than anticipated. New orders for key US-manufactured capital goods unexpectedly fell in February.

Wednesday’s data followed the release of a Conference Board survey on Tuesday showing US consumer confidence plunged to the lowest level in more than four years this month, with households fearing a coming recession.

BofA Securities analysts said in a note on Wednesday that US Treasury yields remained stuck between two opposing themes: they have adjusted lower in recent weeks to account for heightened growth concerns stemming from tariff uncertainty. At the same time, economic fundamentals have held firm, and inflation risks remain high.

Portfolio reallocations in the last days of the quarter, when money managers adjust portfolios to account for the quarter’s moves in stocks and bonds, may have also added some selling pressure, said Tony Farren, managing director at Mischler Financial Group.

“That trade has started, it’s not something you can do just the last day of the quarter … you have to ease your way into it,” he said, talking about investors selling bonds for stocks.

The Treasury sold USD 70 billion in five-year notes on Wednesday in an auction to lukewarm demand. The 4.1% yield was marginally above market at the bidding deadline, suggesting investors demanded higher compensation to absorb them.

The bid-to-cover ratio, a measure of demand, was 2.33 times, the lowest since May 2024.

(Reporting by Davide Barbuscia; Editing by Sharon Singleton and Richard Chang)

Oil edges higher on tighter supply concerns

Oil prices climbed on Wednesday in early Asia trade on concerns of tighter supplies after US President Donald Trump threatened tariffs against countries importing oil and gas from Venezuela and after US crude inventories fell more than expected.

Brent crude futures gained 25 cents, or 0.3%, to USD 73.27 a barrel by 1214 GMT, while US West Texas Intermediate crude futures rose 28 cents, or 0.4%, to USD 69.28 a barrel.

On Monday Trump signed an executive order authorizing his administration to impose blanket 25% tariffs under the 1977 International Emergency Economic Powers Act on imports from any country that buys Venezuelan crude oil and liquid fuels.

Oil is Venezuela’s main export. China, already a target of US import tariffs, is its largest buyer.

The Trump administration also on Monday extended a deadline to May 27 for US producer Chevron to wind down operations in Venezuela.

The withdrawal of Chevron’s license to operate could reduce production in the country by about 200,000 barrels per day, according to ANZ analysts.

Also supporting prices, industry data showed US crude inventories fell by 4.6 million barrels in the week ended March 21, market sources said citing American Petroleum Institute figures. Analysts polled by Reuters were expecting a decline of 1 million barrels.

Official US government data on crude inventories is due on Wednesday.

Limiting oil price gains, the United States reached deals with Ukraine and Russia to pause attacks at sea and against energy targets, with Washington agreeing to push to lift some sanctions against Moscow.

Kyiv and Moscow both said they would rely on Washington to enforce the deals, while expressing skepticism that the other side would abide by them.

(Reporting by Stephanie Kelly; Editing by Sonali Paul)

US stocks end higher as traders focus on tariffs, data

Wall Street stocks ended higher on Tuesday, with Apple rising and Nvidia dipping as investors assessed consumer sentiment data and bet on a more flexible trade policy stance from the Trump administration next week.

US President Donald Trump said on Monday that automobile tariffs were coming soon, while suggesting that not all proposed tariffs would be enforced in an April 2 announcement on which Wall Street is focused.

“I don’t expect that we’ll get the clarity that the market is hoping for, but investors are desperate for any sort of clarity on this front, and to the extent they’ll get some of it, it’s a huge day,” said Ross Mayfield, an investment strategist at Baird.

Weighed by worries that Trump’s tariffs would fuel inflation and hurt economic growth, the S&P 500 is down about 2% so far in 2025, and it is on track for its first quarterly loss since June 2023.

Ratings agency Moody’s said on Tuesday that the United States’ fiscal strength is on track for a continued multiyear decline as budget deficits widen and debt becomes less affordable.

Another report revealed a dip in consumer confidence, with the index falling to 92.9 in March – its lowest since February 2021.

Apple rose 1.4%, helping keep the Nasdaq in positive territory, while Nvidia slid 0.6%.

Tesla shares rose 3.45%, adding to a 12% rally the previous day. The company’s market share in Europe continued to shrink in February as sales of the all-electric car maker dropped for a second month, even as EV registrations overall on the continent grew.

KB Home fell over 6% after the homebuilder cut its full-year 2025 revenue forecast.

The S&P 500 climbed 0.16% to end the session at 5,776.65 points.

The Nasdaq gained 0.46% to 18,271.86 points, while the Dow Jones Industrial Average rose 0.01% to 42,587.50 points.

Of the 11 S&P 500 sector indexes, seven rose, led by communication services, up 1.43%, followed by a 0.98% gain in consumer discretionary.

Fed Governor Adriana Kugler said the central bank’s interest rate policy remains restrictive, but progress on bringing inflation back to the central bank’s 2% target has slowed.

New York Fed President John Williams said firms and households were “experiencing heightened uncertainty” about what lies ahead for the economy.

Among a cascade of economic indicators scheduled this week, focus will be on the personal consumption expenditures price index – the Fed’s preferred inflation gauge – due on Friday.

CrowdStrike gained 3.3% after brokerage BTIG raised its rating on the cybersecurity company to “buy” from “neutral.”

Declining stocks outnumbered rising ones within the S&P 500 by a 1.3-to-one ratio.

The S&P 500 posted 11 new highs and 4 new lows; the Nasdaq recorded 42 new highs and 160 new lows.

Volume on US exchanges was relatively light, with 13.0 billion shares traded, compared with an average of 16.4 billion shares over the previous 20 sessions.

(Reporting by Pranav Kashyap, Johann M Cherian and Lisa Pauline Mattackal in Bengaluru, and by Noel Randewich in San Francisco; Editing by Maju Samuel and Matthew Lewis)

US dollar unmoored as traders unsure on tariffs

The dollar took a breather on Wednesday, with weak US confidence data and concerns about the effect of sweeping tariffs on US growth putting the brakes on a recent bounce.

The dollar reversed by about 0.5% on the yen overnight, crossing below 150 yen to sit at 149.95 early in the Asia session. The euro, which spent a week edging lower from a five-month high, has now steadied at USD 1.0789.

The euro and Russia’s ruble had no immediate reaction to US deals with Russia and Ukraine to pause attacks at sea and on energy targets, though wheat prices fell as the US said it will push to lift sanctions on Russian agriculture.

Nerves are focused on next week, when US President Donald Trump has threatened to impose – or at least provide details of – a messy round of tariffs on autos, chips and pharmaceuticals.

The trade-sensitive Australian dollar hovered just above 63 cents ahead of monthly inflation data that is likely to be sticky and to reinforce bets the central bank will be in no rush to cut interest rates.

The Aussie had little reaction to Tuesday’s federal budget, which promised tax cuts and extra borrowing to fund relief measures for voters ahead of a May election.

“The major driver of AUD/USD over the next few weeks, and possibly months, will be the new US trade policy and the response from foreign governments,” said Commonwealth Bank of Australia strategist Joe Capurso.

“If market participants are caught flat footed by larger than expected US tariffs and retaliation by other governments next week, AUD/USD can test USD 0.60 in coming weeks.”

The New Zealand dollar was steady at USD 0.5732.

Tariffs and threats of the duties have already driven counterintuitive moves in currency markets as concerns they may drive down US growth have confounded the assumption that the levies should be inflationary and drive up the dollar.

Overnight data showing US consumer confidence plunged to the lowest level in more than four years in March highlighted how the uncertainty is weighing heavily on households.

For the quarter, the dollar index – which had rallied strongly between September and January – is headed for a roughly 4% drop.

Sterling held steady at USD 1.2948 ahead of British inflation data and a budget update due later in the day.

(Reporting by Tom Westbrook; Editing by Jamie Freed)

US equity funds’ weekly outflows surge to a three-month high on tariff concerns

US equity funds saw the largest net outflows in three months in the week through March 19 on worries about the impact of US tariff policies and caution ahead of a monetary policy decision from the Federal Reserve.

According to LSEG Lipper data, investors pulled USD 33.53 billion from US equity funds during the week in their largest weekly net withdrawal since December 18, contrasting with USD 4.84 billion in net purchases the week before.

The Fed kept its benchmark overnight interest rate unchanged on Wednesday, and indicated that two quarter-point cuts were likely later this year, while also forecasting slower economic growth and higher inflation.

US large-cap funds saw USD 27.38 billion of net selling as investors ended a three-week buying streak.

Small-cap, multi-cap, and mid-cap funds also saw outflows of USD 3.48 billion, USD 1.42 billion and USD 1.09 billion, respectively.

Selling pressure in sectoral funds, however, eased to the lowest in three weeks as investors pulled out a net USD 1.35 billion, compared with combined net sales of USD 7.54 billion in the prior two weeks.

Tech, communication services, and healthcare funds led sectoral outflows, with net sales of USD 451 million, USD 230 million, and USD 227 million, respectively.

US bond funds, meanwhile, saw their first weekly outflow in 11 weeks, amounting to USD 513 million.

Investors divested general domestic taxable fixed income funds and loan participation funds worth USD 1.56 billion and USD 1.62 billion, respectively.

In contrast, short-to-intermediate government and treasury funds attracted a net USD 2.89 billion, the 13th weekly inflow in a row.

US investors, meanwhile, ditched USD 28.83 billion worth of money market funds after USD 13.43 billion in net sales a week ago.

(Reporting by Gaurav Dogra and Patturaja Murugaboopathy in Bengaluru. Editing by Mark Potter)

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