MARKET WRAPS

Watch For:

France CPI, consumer spending; U.K. house price index; Germany unemployment; CPI data for Germany, North Rhine Westphalia, Bavaria, Brandenburg, Hesse, Baden-Wuerttemberg, Saxony; Italy CPI; trading updates from Holcim, Allianz, Clariant, BASF, International Consolidated Airlines Group, Nexi, Rightmove, Pearson

Opening Call:

European stock futures were lower early Friday, tracking declines in Asian equities. The dollar gained and Treasury yields fell; oil futures and gold were also lower.

Equities:

Stock futures point to a lower open in Europe as President Trump's fresh tariff threats have spooked investors.

In a social-media post Thursday, Trump reiterated tariffs on Canada and Mexico would start Tuesday, and said another 10% levy on China would begin the same day.

U.S. stock fell Thursday. "What the market hates is surprises," said Michael Antonelli, managing director at Baird. "We're in this world where we get daily surprises."

There's a high likelihood of a 15%-plus correction in U.S. shares this year due to stretched valuations and Trump's more negative policies around trade and government spending, said Shane Oliver, chief economist at AMP.

Wall Street is worried Trump's tariffs will complicate the Federal Reserve's battle with inflation. The Fed's preferred inflation gauge --the personal consumption expenditures, or PCE, price index -- is in focus today.

Forex:

The U.S. dollar gained as Trump confirmed trade tariffs are set to go into effect next week. AlphaSimplex's Katy Kaminski said markets are struggling to figure out the implications of tariffs, while reacting to the prospect of an increase in U.S. inflation and weakening growth in tariffed economies, at least in the short term.

The assumption is that the Fed would maintain interest rates higher to keep prices in check while U.S. trade partners would see lower rates to support growth.

Bonds:

U.S. government bond yields were lower after the sell-off on Thursday lifted the 10-year Treasury yield from an 11-week low following President Trump's fresh tariff threat and an updated reading on fourth-quarter economic growth.

Separately, initial jobless claims matched a three-month high as the White House prepares for more federal job cuts.

The claims data "suggests the jobs market is starting to weaken," said David Russell, global head of market strategy at TradeStation, a Florida-based online brokerage firm. "Investors would rather see clear signs of inflation moderating, but they're getting some stagflationary signals instead."

Energy:

Oil futures fell, dragged by hopes for a Ukraine peace deal. President Trump on Thursday struck a more supportive tone on Ukraine during meetings with British Prime Minister Starmer. This might lower tensions ahead of a meeting with Ukrainian President Zelensky today.

"Any resolution to the conflict could ease supply concerns and weigh on prices, although market participants remain wary," says George Pavel, general manager at Naga.com Middle East.

Metals:

Gold declined but a robust U.S. economy and price pressures could weigh. Given factors such as U.S. 4Q GDP growth at 2.3% and core PCE deflator at uncomfortably high 2.7%, it's becoming clear that the Fed won't have any scope to cut rates early, TD Securities' Bart Melek said.

"The rate environment will no doubt make it more difficult to carry gold and other precious metals," the head of Commodity Strategy added.

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Base metals were mixed. Uncertainty in the macroeconomic environment was weighing on market sentiment, the ANZ Research team said.

Trump's confirmation of tariffs on Canada and Mexico starting next week is also raising concerns about a broader trade war and its impact on global economic growth, ANZ added.

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Iron ore fell as investors assess U.S. President Trump's plans to impose an additional 10% tariff on imports from China.

The U.S. president earlier this month announced a 25% tariff on U.S. imports of steel.

TODAY'S TOP HEADLINES

Trump Plans Another 10% Tariff on Products From China

WASHINGTON-The U.S. plans next week to impose an additional 10% tariff on imports from China over its role in the fentanyl trade and move forward with 25% tariffs on products from Canada and Mexico, President Trump said Thursday, setting up a pivotal week for his protectionist trade agenda.

The China move, slated to take effect Tuesday along with the Canada and Mexico actions, doubles up on the previous 10% additional tariff Trump placed on Chinese products this month.

Fed's Schmid warns against rate cuts in response to weaker outlook

The Federal Reserve should think hard before cutting interest rates in response to any weakness in the economy, Kansas City Fed President Jeffrey Schmid said Thursday.

Schmid, a voting member of the Fed's interest-rate committee this year, said he's growing concerned about the inflation outlook.

The Fed's Next Inflation Test Is Here. How It Will Guide Interest Rates.

The Federal Reserve's preferred inflation gauge cooled in January, if economists' forecasts are right.

The Bureau of Economic Analysis is scheduled to release the latest reading for the personal consumption expenditures, or PCE, price index on Friday, Feb. 28, at 8:30 a.m. Eastern. Economists expect inflation rose 0.3% in January and 2.5% from a year earlier, according to a FactSet survey. By comparison, the index rose 0.3% month over month in December and measured 2.6% year over year.

Ukraine Rattled as U.S. Negotiator Points to Russia-Backed Template for Peace

A suggestion by the Trump administration's top negotiator that a Ukraine peace deal would be based on talks conducted in Istanbul nearly three years ago has buoyed Russian officials and spooked Ukraine and its backers.

To Kyiv, recent remarks by special envoy Steve Witkoff appeared to embrace the Kremlin's key, and incorrect, talking point over the past three years: that Ukraine and Russia were about to strike a peace deal in Istanbul, and that Kyiv walked away from an agreement under pressure from Western politicians, such as then-British Prime Minister Boris Johnson.

European Stocks Are Still on Sale. Where to Shop Now.

Nobody goes there anymore, it's too crowded. So said that late, great philosopher, Yogi Berra.

Case in point: Europe. And it isn't just Barcelona, where locals protested the hordes of tourists last summer by spraying them with water guns.

HP to Trim Up to 2,000 More Jobs in Expanded Cost-Cutting Push

HP Inc. said it would lay off up to 2,000 more employees as part of a continuing cost-cutting plan, bringing the total number of job cuts under the restructuring to as many as 9,000.

The computer and printer maker on Thursday said it would save an additional $300 million by the end of its fiscal 2025, which ends in October. It expects to incur about $150 million in additional restructuring and other charges in connection with the cuts, primarily due to cash labor costs.

Write to [email protected]

Expected Major Events for Friday

05:30/NED: Jan PPI

06:00/FIN: 4Q GDP

06:00/FIN: Jan Retail sales

07:00/SWE: Jan Retail sales

07:00/NOR: Jan Retail Sales

07:00/SWE: 4Q GDP

07:00/TUR: 4Q GDP

07:00/DEN: Jan Unemployment

07:00/GER: Jan Retail Trade

07:00/UK: Feb Nationwide House Price Index

07:00/TUR: Jan Employment / Unemployment

07:00/GER: Jan Foreign trade price indices

07:30/HUN: Jan PPI

07:30/SWI: Jan Retail Sales

07:45/FRA: Jan Household consumption expenditure in manufactured goods

07:45/FRA: Feb Provisional CPI

07:45/FRA: 4Q GDP - detailed figures

07:45/FRA: 4Q Job creation

07:45/FRA: Jan Housing starts

08:00/SVK: Jan PPI

08:00/SWI: Feb KOF economic barometer

08:00/CZE: 4Q GDP

08:55/GER: Feb Labour market statistics (incl unemployment)

09:00/ITA: Jan Foreign Trade non-EU

09:00/BUL: Jan PPI

09:00/ICE: 4Q GDP

09:00/GER: Feb Bavaria CPI

09:00/GER: Feb North Rhine Westphalia CPI

09:00/GER: Feb Saxony CPI

09:00/GER: Feb Brandenburg CPI

09:00/GER: Feb Hesse CPI

09:00/GER: Feb Baden-Wuerttemberg CPI

10:00/MLT: Jan Registered Unemployed

10:00/BEL: 4Q Final GDP

10:00/CRO: Jan PPI

10:00/GRE: Jan PPI

10:00/GRE: Dec Turnover Index in Retail Trade

10:00/LUX: Jan PPI

10:00/ITA: Feb Cities CPI

10:00/ITA: Feb Provisional CPI

All times in GMT. Powered by Onclusive and Dow Jones.

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This article is a text version of a Wall Street Journal newsletter published earlier today.

(END) Dow Jones Newswires

02-28-25 0014ET