Stocks waver as Trump raises trade risk with China

Stocks wavered on Friday, but the dollar mostly gained, after President Donald Trump put US-China trade tensions back on the boil by claiming Beijing “has totally violated” an agreement with Washington.

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His social media post came hours after US Treasury Secretary Scott Bessent said trade talks with China aimed at putting to bed sky-high mutual tariffs - currently suspended - were “a bit stalled”.

The development risks renewed trade pugilism between the world’s two biggest economies.

"If President Trump does slap tariffs back on Chinese imports to the US... we may see demand for US assets, and the dollar, severely impaired by a chaotic and undiplomatic approach to trade policy,” said Kathleen Brooks, research director at XTB.

Investors, though, appeared largely inured to Trump's now-familiar cycle of making dramatic trade threats then retreating, with many more focused on economic data.

New York indices slid at the start of trading, but London and Frankfurt were up, while Paris dipped. Asian share markets had already closed down, before Trump's latest broadside against Beijing was published.

A key US inflation indicator released Friday showed April core price rises had slowed to 2.1 per cent, milder than expected.

That could support arguments for the Federal Reserve to cut US rates - though analysts warned that the inflationary effects of Trump's tariffs were yet to come and could cause the Fed to maintain its watch-and-wait stance.