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Markets wait for tariff news, US data

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MSCI All-Country index hits all-time high

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Euro zone PMI shows growth stalled in May

(Updates throughout after European market open)

By Elizabeth Howcroft

PARIS, June 4 (Reuters) - European stock indexes were

mostly higher on Wednesday and the dollar was little changed, as

uncertainty about U.S. President Donald Trump's tariff plans and

negotiations with China dominated market sentiment.

Trump has set Wednesday as the deadline for when trading

partners should submit proposals for trade deals to avoid his

"Liberation Day" tariffs from taking effect in five weeks' time.

Higher U.S. tariffs on steel and aluminium also took effect

on Wednesday, applying to all trading partners apart from

Britain, which is so far the only country to have struck a

preliminary trade agreement.

The dollar-denominated MSCI All-Country index

edged up to a record high, driven up over the

past few weeks by the weakness in the U.S. currency, although

trading remained muted as investors waited for news about a

possible phone call between Trump and Chinese Leader Xi Jinping,

expected some time this week.

A social media post from Trump before European markets

opened hurt sentiment.

"I like President Xi of China, always have, and always will,

but he is VERY TOUGH, AND EXTREMELY HARD TO MAKE A DEAL WITH,"

Trump said in a post on Truth Social.

At 0956 GMT, the pan-European STOXX 600 was up 0.5%

, while Germany's DAX was up 0.8%.

The U.S. dollar was flat, with the dollar index at 99.171

, while the euro was up 0.1% on the day at $1.1383

.

Amelie Derambure, Senior Multi-Asset Portfolio Manager at

Amundi in Paris, said she was surprised by the relative calm in

markets about the threat of tariffs.

"To me there is a clear willingness of markets to believe

that at the end of the day the Trump administration will not

break U.S. growth," she said.

Still, there could be further shifts in traders' behaviour

to come as the tariffs come closer to taking effect, Derambure

said.

"I think we can expect some higher volatility in the coming

days up to the end of the pause in tariffs," she said.

The on-again-off-again tariffs from Trump have led to

investors fleeing U.S. assets in search of safe havens,

including gold and other currencies, this year as they expect

trade uncertainties to take a toll on the global economy.

Traders are waiting for U.S. data later in the session to

give clues as to how companies are affected by tariffs, ahead of

monthly payroll data on Friday.

"The market is believing that all the back-and-forth, all

the uncertainty, has not for the moment had a big impact on

firms' behaviour," Amundi's Derambure said.

"If this assumption were to change for whatever reason,

because of weakening of data or because some companies will

change their guidance or express more concerns, this can shift

relatively rapidly."

European government bond yields were slightly higher, with

the benchmark 10-year German Bund yield up 3 basis points, at

2.533%.

The European Central Bank's two-day policy meeting begins on

Wednesday. The central bank is expected to cut rates on Thursday

and carry on easing monetary policy, after data on Tuesday

showed inflation in May easing below the ECB's target of 2%.

Euro zone business growth stalled in May, PMI data showed.

Oil prices were steady, with Brent crude futures up

0.3% at $65.85, as concerns about output increases were offset

by supply pressure in Canada due to wildfires there.

Gold was helped by the weaker dollar and simmering trade

tensions, up 0.3% on the day at $3,361.65.