The European Central Bank chief is expected to outline plans to offer fresh assistance to banks (Daniel ROLAND)

New York (AFP) – Wall Street stocks bounced following a report that the United States could delay tariffs on Mexico, while the euro rallied following a European Central Bank policy decision that was not as dovish as expected.

Major US indices had been mildly positive through early afternoon but added to gains after Bloomberg reported the United States could push back a plan to impose tariffs on Mexico on June 10 to permit more time for talks on illegal immigration.

Adding to the hopes were upbeat comments from Mexican Foreign Minister Marcelo Ebrard, who said talks with US officials had yielded progress.

“Yes, I think we have advances today,” Ebrard told reporters after more than two hours of talks with mid-level US officials.

Investor unease over trade has risen since US President Donald Trump a week ago announced he would put tariffs on Mexican imports unless it did more to stem the flow of migrants at the southwestern United States border. 

But major US indices finished solidly higher for a third straight day, with the S&P 500 gaining 0.6 percent. 

Stocks also rose on Tuesday and Wednesday following more dovish commentary from Federal Reserve officials that analysts said opened the door to an interest rate cut in the coming months. 

– Not dovish enough –

The shift in tone at the Fed also played a role in the strengthening of the euro following an ECB announcement that it would extend its key interest rates for the eurozone at historic lows for at least the next six months.

“We are far away from normalization because the rest of the world, and the rest of the challenges, are far away from being normal,” said ECB Chief Mario Draghi.

Still, the euro pushed higher following the announcement. 

“On balance, the ECB’s move didn’t match the degree of dovishness from America’s central bank which seemingly teed up a rate cut as soon as July,” said Joe Manimbo, senior market analyst at Western Union Business Solutions.

Similarly, Fawad Razaqzada at Forex.com said the market’s initial response “was that the central bank was not dovish enough and so the euro spiked higher and the DAX lower.”

Among European bourses, Frankfurt dipped, while London and Paris notched modest gains. 

On the corporate front, shares in Renault slumped by nearly seven percent after Italian-American Fiat scrapped its blockbuster merger proposal. Fiat shares slid 0.5 percent on the Milan stock market.

– Key figures around 2050 GMT –

New York – Dow: UP 0.7 percent at 25,720.66 (close)

New York – S&P 500: UP 0.6 percent at 2,843.49 (close)

New York – Nasdaq: UP 0.5 percent at 7,615.55 (close)

London – FTSE 100: UP 0.6 percent at 7,259.85 (close)

Frankfurt – DAX 30: DOWN 0.2 percent at 11,953.14 (close)

Paris – CAC 40: UP 0.3 percent at 5,278.43 (close)

Milan – FTSE MIB – UP 0.1 percent at 20,177.81 (close)

EURO STOXX 50: DOWN 0.1 percent at 3,338.41 (close)

Tokyo – Nikkei 225: FLAT at 20,774.04 (close)

Hong Kong – Hang Seng: UP 0.3 percent at 26,965.28 (close)

Shanghai – Composite: DOWN 1.2 percent at 2,827.80 (close)

Euro/dollar: UP at $1.1272 from $1.1221 at 2100 GMT Wednesday 

Pound/dollar: UP at $1.2689 from $1.2687 

Dollar/yen: UP at 108.50 yen from 108.46 yen 

Oil – Brent Crude: UP $1.04 at $61.67 per barrel

Oil – West Texas Intermediate: UP 91 cents at $52.59 per barrel

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Disclaimer: Validity of the above story is for 7 Days from original date of publishing. Source: AFP.