Google parent Alphabet weighs on Wall Street, ASX set to rise; Nissan-Honda deal in jeopardy

After rocking financial markets around the world at the start of this week, worries about a potentially punishing global trade war have eased a bit after Trump gave 30-day reprieves for tariffs on both Mexico and Canada. That bolstered traders’ hopes that Trump sees tariffs as merely a tool for negotiation, rather than as a long-term policy.

Goldman Sachs economist David Mericle says a further extension may happen, but he sees the tariff risk for both countries likely remaining until the end of a review of the United States’ existing trade agreement with the two countries, which could be in the middle of next year.

In the meantime, Trump has pressed ahead with tariffs on Chinese goods, and Mericle expects tariffs to hit autos from the European Union, among other potential moves. That could drive a one-time boost to inflation, which could leave a widely followed underlying measure of it at 2.6 per cent in December, above the Federal Reserve’s target of 2 per cent.

One of the fears hurting Wall Street is that the upward pressure on inflation could keep the Fed from cutting interest rates this year, after it began doing so in September in order to relax pressure on the economy and give the job market some help.

Yields in the bond market fell Wednesday after a report said growth for mining, finance and other US services businesses was weaker last month than economists expected. The survey by the Institute for Supply Management found many businesses citing poor weather conditions. Many also “mentioned preparations or concerns related to potential US government tariff actions; however, there was little mention of current business impacts as a result,” according to Steve Miller, chair of the ISM’s Services Business Survey Committee.

The yield on the 10-year Treasury yield fell to 4.42 per cent from 4.52 per cent late Tuesday. The two-year Treasury yield, which more closely tracks expectations for action by the Fed on short-term interest rates, fell to 4.14 per cent from 4.22 per cent.

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On Wall Street, Fiserv was one of the strongest forces pushing upward on the S&P 500 after the payments and financial technology company topped analysts’ expectations for profit in the latest quarter. It rose 6.7 per cent after it also gave a forecasted range for profit this upcoming year whose midpoint was close to analysts’ expectations.

The Walt Disney Company swung from an early gain to a loss of 1.1 per cent after delivering a stronger profit for the latest quarter, thanks in part to a strong performance for its ” Moana 2 ” movie.

In stock markets abroad, European indexes were mixed amid relatively modest movements. In Asia, Hong Kong’s Hang Seng fell 0.9 per cent, while South Korea’s Kospi gained 1.1 per cent.