Global stock index drops, dollar up

The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, rose 0.26% to 100.05

The U.S. dollar index rose on Thursday while MSCI’s global equities gauge fell as stronger-than-expected megacap earnings reports were balanced against signs of rising inflation and investor anxiousness ahead of President Donald Trump’s deadline for trade agreements.

Trump gave Mexico a 90-day reprieve from higher tariffs to negotiate a broader trade deal but was expected to issue higher final duty rates for most other countries as the clock wound down on the Friday deadline.

Earlier in the day, an economic data release showed U.S. inflation increased in June as tariffs on imports started raising the cost of some goods, supporting economists’ expectations that price pressures would pick up in the second half of the year.

Thursday’s data also showed fewer-than-expected Americans applied for unemployment benefits, while second-quarter U.S. labour costs increased slightly more than expected on a pick-up in wage growth.

With the economic data appearing to support the Fed’s more hawkish stance and an anxious wait for Friday’s payroll report along with Trump’s tariff deadline, investors had an awful lot to handle this week, said Kevin Gordon, senior investment strategist at Schwab.

This is one of those weeks where it’s almost too much information to digest, so the market is ignoring it all and staying in a tight range, Gordon said.

However, he noted megacap strength was countering weakness elsewhere in the market including in small-cap companies, which have less latitude to cope with higher prices.

You really only have communications services and parts of technology that are holding you up today. Breadth is generally pretty weak, the strategist said.

In currencies, the U.S. dollar was eyeing its first monthly gain for 2025 against major currencies, underpinned by hopes for clarity on trade policy and U.S. economic resilience.

For the day, the dollar index, which measures the greenback against a basket of currencies including the yen and the euro, rose 0.26% to 100.05.

The euro was up 0.08% at $1.1413 and the Mexican peso strengthened 0.23% versus the dollar at 18.854.

But against the Japanese yen, the dollar strengthened 0.84% to 150.76 after the Bank of Japan held interest rates steady and increased its inflation forecast.