Stocks backtrack as US inflation adds to trade war worries

LONDON: Wall Street looked set to extend a run of losses for world stocks and safe-haven gold notched another record high on Friday, as the latest tariffs from US President Donald Trump stoked worries of an all-out trade war.

- 

US traders had new sticky inflation data to grumble about but it was Trump's 25% tariffs on auto imports and plans for much broader levies next week that continued to cause the nail-biting.

S&P 500 futures were down. Europe's STOXX 600 index was set for a 18 weekly drop thanks to a 2% drop by the car and auto parts sector while both Japan and Korea's markets - home to giants like Toyota Honda and Hyundai - had both fallen roughly 2% overnight.

State Street’s head of global macro strategy Michael Metcalfe said that US car tariffs had been more aggressive than expected, especially as there had been no adjustments made for Washington’s relations with Mexico and Canada.

“What I don’t know is whether the hawkishness of the auto tariffs is going to translate to the broader tariffs that we are going to get next week,” Metcalfe said. “And that is keeping risk appetite on the back foot.” In currency markets, the dollar steadied elsewhere after US Personal Consumption Expenditures data, the Federal Reserve’s preferred gauge for price, rose at a slightly faster monthly rate of 0.41.