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Stocks, oil prices struggle as tariffs fuel global growth

fears

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U.S. Treasury yields near lows on rate cut bets

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Corporates grapple with Trump's tariffs, UPS cuts 20,000

jobs

By Rae Wee

SINGAPORE, April 30 (Reuters) - Shares struggled for

direction on Wednesday and oil prices slid as relief over a

potential easing of global trade tensions was offset by a

worsening economic outlook and dour signals from corporates

swept up by Donald Trump's tariffs.

U.S. Treasury yields also languished near multi-week lows as

traders raised bets of more rate cuts from the Federal Reserve

to support the world's largest economy.

Despite Trump's move to soften the blow of his auto tariffs

and signs of progress in broader trade negotiations, details

remain scant, with Commerce Secretary Howard Lutnick saying he

had reached one deal with a foreign power.

Adding to the tariff anxiety, investors were also grappling

with deteriorating U.S. data as Trump's hefty tariffs rippled

across businesses and consumers at home.

"We raise the probability of a prolonged economic stagnation

in the coming months, meeting the criteria for a recession, to

50%," said David Kohl, chief economist at Julius Baer.

"The rising probability of economic stagnation in the U.S.

is entirely due to the exogenous forces of an erratic and

restrictive economic policy with arbitrary tariffs, disruptions

to public spending, changing incentives, and an unsustainable

fiscal stance."

Data on Tuesday showed the U.S. trade deficit in goods

widened to a record high in March as businesses stockpiled ahead

of Trump's tariffs, suggesting trade was a large drag on

economic growth in the first quarter. First quarter GDP data is

due later in the day.

U.S. consumer confidence also slumped to a nearly five-year

low in April.

The precarious state of the global economic outlook,

particularly in the United States, left Wall Street futures

struggling to sustain gains made during the cash session

overnight.

Nasdaq futures were down 0.6% in Asia, while S&P 500

futures fell 0.4%.

EUROSTOXX 50 futures swung between slight losses

and gains, while MSCI's broadest index of Asia-Pacific shares

outside Japan added just 0.1%.

The Nikkei tacked on 0.15%.

The fallout from Trump's trade war reverberated further

through the corporate world as delivery giant UPS said

it would cut 20,000 jobs to lower costs, while General Motors ( GM )

pulled its outlook and delayed its investor call, joining

a list of companies that have ditched forecasts for 2025 or

slashed outlooks.

"You start to see companies... making some statements about

low visibility, the unwillingness or inability to sign long-term

contracts, to make long-term plans - that's a very slippery

slope," said Fabiana Fedeli, M&G's chief investment officer of

equities, multi asset and sustainability at a media roundtable

on Monday.

Oil prices also extended their steep losses from the

previous session on worries about global growth and its impact

on demand.

Brent crude futures were down 0.28% to $64.07 a

barrel having tumbled 2.4% overnight. U.S. crude lost

0.35% to fetch $60.21 per barrel, after a 2.6% drop on Tuesday.

Spot gold was steady at $3,316.11 an ounce.

DATA DUMP

U.S. growth figures aside, the release of the core PCE price

index - the Fed's preferred measure of inflation - is also due

later on Wednesday, ahead of jobs data at the end of the week.

Payrolls are seen rising 130,000 and inflation is expected

to ease, but there is much more uncertainty about GDP with the

median forecast for a meagre 0.3% annualised growth.

Markets are now pricing in 97 basis points worth of rate

cuts from the Fed by December, up from about 80 bps early last

week.

That has in turn pushed U.S. yields down, with the two-year

Treasury yield at a three-week trough of 3.6400%. The

benchmark 10-year yield last stood at 4.1580%, also

its lowest since early April.

In the foreign exchange market, the dollar steadied on

Wednesday, as a selloff in the U.S. currency hit pause as

traders considered the prospects for a negotiated resolution to

the tariffs.

The dollar last bought 142.29 yen while the euro

was some distance away from an over three-year top at

$1.1383.

The Aussie extended early gains to trade 0.3%

higher at $0.6401 after consumer prices rose slightly more than

expected in the first quarter.

Elsewhere, data from China showed manufacturing activity

contracted in April, reversing two months of recovery and

keeping alive calls for further stimulus from Beijing.

Chinese shares opened on a muted note in line with the

broader market. The CSI300 blue-chip index was up

0.12%, while Hong Kong's Hang Seng Index slid 0.08%.

The onshore yuan eased slightly to 7.2736 per dollar

.

"In light of tariffs, we have revised down our 2025 and 2026

(China) GDP growth forecasts to 4%, assuming additional stimulus

of 2.5% of GDP, and now envisage more sustained deflationary

pressures over this year and the next," said economists at

Societe Generale in a note.