(Updates to afternoon)

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German Bund futures fall on debt brake agreement

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New US tariffs on Canada, Mexico, China come into force

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Stock indexes off lows of the day

By Caroline Valetkevitch

NEW YORK, March 4 (Reuters) - Major stock indexes cut

losses and the Nasdaq turned positive Tuesday afternoon, while

the euro rallied as German political parties agreed to a 500

billion euro infrastructure fund and after news that U.S.

President Donald Trump's administration and Ukraine plan to sign

a minerals deal.

Reuters reported, citing people familiar with the situation,

that Trump's administration and Ukraine plan to sign the

much-debated minerals deal following a disastrous Oval Office

meeting Friday.

Meanwhile, Germany's conservatives and Social Democrats

announced proposals to set up a 500 billion euro fund for

infrastructure and overhaul borrowing rules aimed at increasing

defense spending.

The euro hit a three-month high of $1.0599. It was last up

1% at $1.0593. The euro was 0.4% higher against sterling

.

Germany's Bund futures turned sharply lower on the

news on Germany, which came after the close of European markets.

They were last down 1%.

German and European stock futures, which had fallen earlier

in the day on U.S. tariff worries, rose. German Dax futures were

last down 1.5% on the day after the benchmark Dax index closed

down 3.5%.

Stock indexes including the S&P 500 were sharply lower

earlier after the United States hit Canada, Mexico and China

with steep tariffs, fueling investor worries about the impact on

the economy.

Tariffs add to concerns about higher prices for consumers,

said Jake Dollarhide, CEO of Longbow Asset Management in Tulsa,

Oklahoma. "This economy has been driven by the consumer and

saved by the consumer. This is about people's grocery bills

going up," he said.

The Dow Jones Industrial Average fell 244.06 points,

or 0.57%, to 42,945.28, the S&P 500 fell 10.27 points, or

0.19%, to 5,838.61 and the Nasdaq Composite rose 128.78

points, or 0.68%, to 18,478.97.

MSCI's gauge of stocks across the globe fell

3.05 points, or 0.36%, to 852.76.

Trump's new 25% tariffs on imports from Mexico and Canada

and the doubling of duties on Chinese imports could rattle

nearly $2.2 trillion in annual trade with the three largest

trading partners of the U.S.

China immediately responded with 10%-15% tariffs on certain

U.S. imports from March 10 and a series of new export

restrictions for designated U.S. entities, while Canadian Prime

Minister Justin Trudeau said Ottawa was launching 25% tariffs on

C$30 billion ($20.72 billion) worth of U.S. imports.

The yield on benchmark U.S. 10-year notes rose

3.4 basis points to 4.214%, from 4.18% late on Monday.