By David Randall
NEW YORK, May 30 (Reuters) - World stock markets climbed for the first time this week on Thursday, giving pause to a multiday selloff on fears of an escalating trade war between the United States and China that has pushed investors into safe-haven bonds and the U.S. dollar.
Signs that the year-long trade dispute between the U.S. and China will not be resolved quickly and concerns over its impact on global growth have roiled markets, sending stock indexes into their most turbulent month of the year so far.
"We oppose a trade war but are not afraid of a trade war," Chinese Vice Foreign Minister Zhang Hanhui said on Thursday in Beijing, when asked about the tensions with the United States.
"This kind of deliberately provoking trade disputes is naked economic terrorism, economic chauvinism, economic bullying." comments followed reports from Chinese newspapers that Beijing could use its rare earth supplies as a bargaining chip https://www.reuters.com/article/us-usa-china-rareearth-explainer/explainer-chinas-rare-earth-supplies-could-be-vital-bargaining-chip-in-u-s-trade-war-idUSKCN1T00EK to strike back at Washington after U.S. President Donald Trump remarked he was "not yet ready" to make a deal with China over trade. earths are elements used in production in industries such as renewable energy technology, oil refinery, electronics and glass. There have been concerns that China, a key exporter of rare earths to the United States, may use that fact as leverage in the trade spat.
"People are trying to figure out how much of the bad news is already priced in. The trade war looks like it might dampen growth but not enough to throw us into a recession," said Scott Brown, chief economist at Raymond James in St. Petersburg, Florida.
"There has been talk about the Fed possibly cutting rates and that is a little bit positive for the stock market."
MSCI's gauge of stocks across the globe .MIWD00000PUS gained 0.34%.
On Wall Street, the Dow Jones Industrial Average .DJI rose 65.06 points, or 0.26%, to 25,191.47, the S&P 500 .SPX gained 12.2 points, or 0.44%, to 2,795.22 and the Nasdaq Composite .IXIC added 39.48 points, or 0.52%, to 7,586.79.
The pan-European STOXX 600 index .STOXX rose 0.48%.
German Bund yields climbed for the first time in four days after hitting record lows and Treasury yields climbed. Money markets are now pricing in roughly two U.S. rate cuts by the start of next year as trade worries weigh on the global economy.
The dollar index .DXY , tracking the greenback against six major currencies, was steady at 98.113 and in reach of a two-year peak of 98.371 set last week.
"The strength in the dollar is surprising given that markets are now expecting multiple rate cuts by 2020," Commerzbank (DE:CBKG) FX strategist Ulrich Leuchtmann said.
Oil prices traded in a tight range after an industry report showed a decline in U.S. crude inventories that exceeded analyst expectations. O/R
That followed volatile trading on Wednesday, when oil prices fell to near three-month lows at one point as trade war fears gripped the commodity markets.
U.S. crude futures CLc1 were up 0.25% at $58.96 per barrel after brushing $56.88 the previous day, their lowest since March 12. Brent crude LCOc1 was flat at $69.13 per barrel.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Global assets in 2019
http://tmsnrt.rs/2jvdmXl Global currencies vs. dollar
http://tmsnrt.rs/2egbfVh Global bonds dashboard (DO NOT USE UNTIL UPDATE FOUND)
http://tmsnrt.rs/2fPTds0 Emerging markets in 2019
http://tmsnrt.rs/2ihRugV MSCI All Country Wolrd Index Market Cap
http://tmsnrt.rs/2EmTD6j EXPLAINER-China's rare earth supplies could be vital bargaining chip in U.S. trade war