Stock markets fell on Friday as a closely-watched US inflation reading heated up, adding to concerns over the fallout from an incoming wave of tariffs by president Donald Trump.
Shares in automakers fell further as they brace for 25-per cent levies due to kick in early next week along with a raft of 鈥榬eciprocal鈥� tariffs tailored to different countries.
The market mood has soured over fears that Trump鈥檚 tactics will trigger tit-for-tat tariffs that would rekindle inflation, which could put the brakes on interest rate cuts and spark a recession.
鈥業nvestors remain nervous over the economic repercussions from President Trump鈥檚 tariff threats, just days before he unleashes his 鈥榬eciprocal tariffs鈥� (on April 2),鈥� said David Morrison, senior market analyst at financial services provider Trade Nation.
Wall Street opened in the red after official data showed the Federal Reserve鈥檚 preferred inflation measure, the personal consumption expenditures (PCE) price index, remained unchanged last month at 2.5 per cent.
But another key figure, core inflation, which strips out volatile food and energy costs, rose more than expected at 2.8 per cent in February on an annual basis, up from 2.6 per cent the month before.
A tit-for-tat trade war and a re-ignition of inflation that could force the Fed and other central banks to rethink plans to cut interest rates.
鈥楾he (PCE) report isn鈥檛 devastating, but given the current economic uncertainty and market volatility, investors were looking for reassurance in this report 鈥� not something to fan the flames,鈥� said Bret Kenwell, US investment analyst at eToro trading platform.
In Spain, data showed inflation eased to 2.3 per cent in March as rainy weather boosted hydro power production and drove down electricity prices.聽Consumer prices rises remained unchanged in France at 0.8 per cent.
Paris and Frankfurt stocks dropped, with automakers Volkswagen, Renault and Stellantis, whose brands include Jeep, Peugeot and Fiat, faring particularly badly.
General Motors and Ford had more limited losses on Wall Street.
London bucked the trend, with the FTSE 100 index rising as data showed that the UK economy expanded more than intially estimated last year and聽retail sales rose.
Tokyo鈥檚 stock market sank 1.8 per cent as the world鈥檚 biggest carmaker Toyota fell, along with Honda, Nissan and Mazda.
Seoul was off 1.9 per cent as Hyundai gave up 2.6 per cent.
Uncertainty over Trump鈥檚 plans and long-term intentions has led investors to rush into safe havens such as gold, which hit a new record high of $3,085.96 an ounce on Friday.
Governments around the world have hit out at Trump鈥檚 latest tariffs, with Canadian Prime Minister Mark Carney saying the 鈥榦ld relationship鈥� of deep economic, security and military ties with Washington 鈥榠s over鈥�.
Tariff worries also saw Hong Kong and Shanghai stock markets fall.
Bangkok was in the red when trading was suspended as the Thai capital was shaken by a powerful earthquake in neighbouring Myanmar.
Investors also kept tabs on Beijing, where Chinese leader Xi Jinping met leading business leaders pledging the country鈥檚 door would 鈥榦pen wider and wider鈥�.
He also warned the world trading system was facing 鈥榮evere challenges鈥�.
