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Bund yields edge higher again after biggest jump since

1990s

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Euro hits new 4-month high after ECB news

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U.S. stocks end sharply lower

(Updates with closing US market levels)

By Caroline Valetkevitch

NEW YORK, March 6 (Reuters) - Stock indexes fell sharply

and the dollar eased on Thursday, with the Nasdaq confirming it

has been in a correction since peaking last December, as more

announcements from U.S. President Donald Trump on tariffs fueled

investor uncertainty.

The global bond market selloff continued, a day after the

10-year German Bund yield saw its biggest rise since the 1990s.

Trading was volatile as investors tried to stay on top of

tariff headlines.

In the latest twist in his fast-changing trade policy,

Trump on Thursday exempted goods from both Canada and Mexico

under a North American trade pact for a month from the 25%

tariffs that he had imposed earlier this week.

The 25% U.S. tariffs on imports from Mexico and Canada were

imposed on Tuesday along with fresh duties on Chinese goods.

"Trump has been very confusing about these tariffs. One day

they're on and the next day they're off for a month," said Tim

Ghriskey, senior portfolio strategist at Ingalls & Snyder in New

York.

"He did warn us that there was going to be some pain

initially here, and the market doesn't like pain," he said.

With Thursday's 2.6% decline, the Nasdaq was down a

total of 10.4% from its record high close on December 16,

meeting a widely used definition of a correction.

The Cboe Volatility index rose to 24.87, its

highest closing level since December 18.

Adding to the negative tone, an index of chipmakers

dropped 4.5% after a sales forecast from Marvell Technology ( MRVL )

failed to excite investors. Marvell ( MRVL ) shares fell 19.8%

on the day.

The Dow Jones Industrial Average fell 427.51

points, or 0.99%, to 42,579.08, the S&P 500 fell 104.11

points, or 1.78%, to 5,738.52 and the Nasdaq Composite

fell 483.48 points, or 2.61%, to 18,069.26.

MSCI's gauge of stocks across the globe fell

8.33 points, or 0.97%, to 850.38. The pan-European STOXX 600

index slipped 0.03%.

The U.S. dollar weakened while the safe-haven yen and Swiss

franc advanced as jittery investors turned risk-averse and

worries mounted over the potential impact of Trump's tariffs on

the U.S. economy.

In afternoon trading, the dollar was down 0.9% against the

yen to 147.65 yen, hitting a five-month low earlier of

147.31. Against the Swiss franc, the dollar dropped to a

three-month low of 0.8828 franc, and last traded down

0.9% at 0.8827.

The single European currency was last down 0.05%

at $1.0785, after earlier hitting a four-month high of $1.0854.

The euro was on track for its biggest weekly jump since May

2009.

The European Central Bank cut interest rates as expected and

also said monetary policy was becoming less restrictive, which

traders took to mean another cut in April might not be a given.

Ten-year German Bund yields were last up 10

basis points at 2.884%, having jumped as high as 2.929% on

Wednesday.

German lawmakers are expected to debate a 500-billion-euro

infrastructure fund and sweeping changes to state borrowing

rules to fund defence from March 13.

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

1.5 basis points to 4.282%, from 4.267% late on Wednesday.

Investors also assessed the latest batch of economic data

for signs of cracks in the economy ahead of Friday's key monthly

U.S. payrolls report.

Weekly initial U.S. jobless claims fell by 21,000 to a

seasonally adjusted 221,000, according to the Labor Department,

a bigger decline than expected by economists polled by Reuters,

who had forecast 235,000 claims.

By contrast, global outplacement firm Challenger, Gray &

Christmas earlier in the day said that planned job cuts vaulted

245% to 172,017 last month, the highest level since July 2020

when the economy was in the midst of the COVID-19 pandemic.

Also in focus were comments by European leaders, who said

they would stand by Ukraine and spend more on defense in a world

upended by Trump's reversal of U.S. policies. Trump's suspension

of military aid to Kyiv this week fanned fears the region can no

longer rely on U.S. protection in place since World War Two.

Oil prices were largely unchanged, with Brent futures

rising 16 cents, or 0.2%, to settle at $69.46 a barrel.

U.S. West Texas Intermediate crude futures gained 5

cents, or 0.1%, to settle at $66.36.

Spot gold fell 0.1% to $2,915.83 an ounce.