Stocks up on relief over tariffs

U.S. stocks rose after President Donald Trump announced tariffs that were narrower than some traders had anticipated. Treasuries and the dollar gained.

The S&P 500 advanced for the fourth time in five days as investors found relief in the president’s decision to exclude Canada and Mexico while giving other countries wiggle room from levies on imports of steel and aluminum that will take effect in 15 days. Technology companies paced gains. Tenyear Treasury yields fell to 2.86 percent.

The dollar rose against the euro after the European Central Bank’s decided to drop a pledge to increase asset purchases if necessary, and as President Mario Draghi downplayed the change. Crude oil traded near $60 a barrel and gold slipped as a Bloomberg gauge of commodities slid for a second day.

“Investors have to take a deep breath and watch what the reality is. It’s a highly complex situation that investors have to try to game, where they believe these (Nafta) negotiations will finally land,” said Chad Morganlander, a portfolio manager at Washington Crossing Advisors, said by phone. “This is a lever for negotiating the Nafta deal, and investors are watching this in a careful way, with one eye on the market and one eye on trade negotiations.”

The specter of a global trade war has had markets on edge this week, as Trump’s threats of steel and aluminum tariffs were met with talk of retaliation in China and Europe. The ECB’s surprise change in language signaled its confidence in the euro area economy even as the concerns rumble on. However in his press briefing after the decision, Draghi acknowledged that protectionist threats represent a downside risk and described unilateral trade decisions as “dangerous.” Investors are now eyeing the upcoming central bank decision in Japan.