- Trump plans tariffs on autos, pharma, chips
- Global shares edge up
- Dollar steady ahead of Fed meeting minutes
- Pound up after hotter UK inflation data
LONDON, Feb 19 (Reuters) - U.S. stock futures fell on Wednesday, suggesting a retreat on Wall Street later, as U.S. President Donald Trump's latest tariff threats on auto, semiconductor and pharmaceutical imports injected a sense of caution into the markets.
Since his inauguration four weeks ago, Trump has imposed a 10% tariff on all imports from China, on top of existing levies. He has also announced, and delayed for a month, 25% tariffs on goods from Mexico and non-energy imports from Canada.
Trump told reporters on Tuesday that sector-wide tariffs on pharmaceuticals and semiconductor chips would start at "25% or higher", rising substantially over the course of a year. He intends to impose similar tariffs on autos as soon as April 2.
Stocks in Europe extended losses, as a rally in drugmakers and miners faded, adding to pressure from a broad-based decline in UK equities after data showed a pickup in British inflation. The STOXX 600 was last down 0.8%.
U.S. index futures , were down 0.2%, having pared earlier gains, which pointed to a modest decline for the S&P, which on on Tuesday squeaked past its previous record closing high.
Overall, market reaction to Trump's threats was mostly muted as investors increasingly see them as smaller-scale bargaining tools.
"The global economy and global financial markets are not all about tariffs. They're also mainly about activity, corporate profitability and interest rates, and it's true that tariffs might impact those three elements, but it's mainly in a contained way, based on what we've seen so far," Lombard Odier economist Samy Chaar said.
"(Trump) should be taken seriously - in the end, tariffs will be higher ... however, you also have to do your work when it comes to assessing and evaluating the impact of these tariffs," he said.
Minutes from the U.S. Fed's January meeting, when the central bank held borrowing costs at 4.25% to 4.5%, are due later on Wednesday. That follows hawkish comments from Fed Chair Jerome Powell in testimony to Congress last week and hot consumer price data.
The dollar edged above two-month lows against a basket of currencies , supported by a degree of unease over bilateral talks this week between the United States and Russia over a possible Ukraine ceasefire that have excluded both Ukraine and European nations.
European leaders vowed to step up support for Ukraine, and the expectation for an increase in defence spending has propelled shares in European arms manufacturers to record highs this week, and pushed up governments' long-term borrowing costs.
Investors also hope this weekend's German election will lead to economic stimulus.
German 30-year bond yields have risen by about 20 basis points in the last two weeks, while those on 30-year U.S. Treasuries have risen by about 17 bps .
In currencies, the New Zealand dollar was 0.2% higher at $0.572 after the central bank cut interest rates by 50 basis points to 3.75% as expected but hinted its aggressive cuts were set to slow.
Sterling got a brief lift from data that showed a pickup in UK inflation in January, but was last down 0.2% at $1.2585.
Gold shrugged off the stronger dollar and rose 0.2% on the day to $2,940 an ounce, having hit yet another record high.
"There must be a large number of traders who switch on their screens each morning expecting a $100-plus overnight slump in the price of gold. Instead, gold continues to make steady upside progress. It has been regularly posting fresh record highs since the beginning of February," David Morrison, senior market analyst at Trade Nation, said.
"One day that will change. But until then the bulls appear happy to make hay while the sun shines."
Additional reporting by Ankur Banerjee in Singapore; Editing by Tomasz Janowski and Helen Popper
Source: Reuters