By Stephen Culp
NEW YORK (Reuters) -U.S. stocks were mixed and benchmark Treasury yields slid on Wednesday as disappointing earnings and mixed economic data counterbalanced easing jitters of a spreading global trade war.
The S&P 500 joined Dow in positive territory, but the tech-heavy Nasdaq remained nominally lower, as disappointing earnings from Alphabet fueled doubts about the payoff of investment in artificial intelligence.
Simmering in the background were worries of escalating tit-for-tat tariff moves.
“We’re seeing very choppy trading today,” said Greg Bassuk, chief executive officer at AXS Investments in New York. “And we think it’s reflective of this investor rollercoaster, whipsawing from the Trump administration directives, corporate earnings and economic data. All three are really keeping investors on their toes.”
Markets appeared to look past U.S. President Donald Trump’s declaration on Tuesday that the United States would take over the Gaza Strip, a move that underscored the likelihood of market volatility under the new administration.
On the economic front, a stronger-than-expected pick-up in ADP’s private payrolls data was offset by a surprise deceleration in the services sector, while record high imports pushed the U.S. trade deficit sharply wider.
The Dow Jones Industrial Average rose 250.64 points, or 0.56%, to 44,806.68, the S&P 500 rose 13.29 points, or 0.22%, to 6,051.17 and the Nasdaq Composite fell 12.59 points, or 0.07%, to 19,641.43.
European stocks ended the session higher, powered in part by healthcare stocks as sales of Novo Nordisk’s blockbuster drug Wegovy more than doubled in the fourth quarter.
MSCI’s gauge of stocks across the globe rose 3.55 points, or 0.41%, to 870.47.
The STOXX 600 index rose 0.47%, while Europe’s broad FTSEurofirst 300 index rose 9.77 points, or 0.46%. Emerging market stocks rose 3.60 points, or 0.33%, to 1,096.53. MSCI’s broadest index of Asia-Pacific shares outside Japan closed higher by 0.41%, to 576.72, while Japan’s Nikkei rose 33.11 points, or 0.09%, to 38,831.48.
U.S. Treasury yields dropped to their lowest level since mid-December in the wake of the disappointing services data, as investors continue to grapple with uncertainties arising from tariff skirmishes.
The yield on benchmark U.S. 10-year notes fell 9.7 basis points to 4.416%, from 4.513% late on Tuesday.The 30-year bond yield fell 11 basis points to 4.6378% from 4.748% late on Tuesday.
The 2-year note yield, which typically moves in step with interest rate expectations for the Federal Reserve, fell 3.6 basis points to 4.179%, from 4.214% late on Tuesday.
The dollar softened as risk of a global trade war appeared to wane.
The dollar index, which measures the greenback against a basket of currencies including the yen and the euro,fell 0.47% to 107.55, with the euro up 0.31% at $1.0409.Against the Japanese yen, the dollar weakened 1.21% to152.46.
The Mexican peso weakened 0.13% versus the dollar at 20.546.
The Canadian dollar strengthened 0.09% versus the greenback to C$1.43 per dollar.
In cryptocurrencies, bitcoin gained 0.63% to $97,116.24. Ethereum rose 4.75% to $2,765.63.
Oil prices dropped as rising U.S. supply and worries of a new China-U.S. trade war overshadowed Trump’s renewed effort to eliminate Iranian oil exports.
U.S. crude fell 2.30% to $71.03 per barrel, while Brent fell to $74.61 per barrel, down 2.09% on the day.
Gold resumed its rally as trade war jitters continue to attract investors to the safe-haven metal, sending it to fresh record highs.
“Gold is one of three things; it’s an inflation hedge, it’s a dollar hedge or it’s a disaster hedge,” said Paul Nolte, senior wealth advisor & market strategist at Murphy & Sylvest in Elmhurst, Illinois.
“For much of the last five or six years, I would say gold was a dollar hedge. Now it has become now more of a hedge against things going wrong,” Nolte added.
Spot gold rose 0.9% to $2,867.60 an ounce. U.S. gold futures rose 0.41% to $2,865.00 an ounce.
(Reporting by Stephen Culp, Editing by Nick Zieminski and Nia Williams)
