Stocks rise as traders weigh US inflation, Trump tariffs

Official data showed that the Fed's preferred gauge of inflation, the personal consumption expenditures (PCE) price index, reached 2.7 percent in August, up from 2.6 percent in July.

The figure is above the central bank's two-percent inflation target.

But it was in line with analyst forecasts, giving investors "some relief that the Fed will remain on track to cut rates two more times this year", said Bret Kenwell, US investment analyst at eToro trading platform.

The Fed must weigh between fighting inflation and propping up a weakening US jobs market, Kenwell said.

Investors were also digesting Trump's latest tariff moves.

The US president announced Thursday steep new tariffs on pharmaceutical products, big-rig trucks, home renovation fixtures and furniture.

He said a 100-percent tariff would be imposed on "any branded or patented" pharmaceutical product from October 1, unless a company is building a manufacturing plant in the United States.

Investors have rethought their view of the tariffs compared with earlier in the year when the market was caught off guard by the breadth of Trump's aggressive trade policy.

While the levies are still on investors' radar, "the market has started to look through tariffs," said Steve Sosnick of Interactive Brokers. "The new market mentality is 'let's not worry about them until we actually see them creating a problem.'"

But share prices of Asian pharma firms faced selling. Shanghai Fosun shed around six percent and South Korea's Daewoong was off more than three percent. Japan's Daiichi Sankyo and Astellas Pharma were also well in the red. 

In contrast, share prices of British pharma giants GSK and AstraZeneca climbed, with both companies having recently announced major investment plans in the United States.

US rivals Pfizer and Merck and France's Sanofi also closed higher.

The European Union was quick to point out that its trade deal with Trump had capped tariffs on EU pharmaceutical goods at 15 percent.

Among other sectors affected by the newest tariffs, US-based truck manufacturing company Paccar jumped more than five percent, while furniture retailer Restoration Hardware fell 4.2 percent.

In non-tariff news, Boeing advanced 3.6 percent after federal air safety regulators restored the company's authority to certify the airworthiness of some new planes, in a sign of officials' increased confidence in the aviation giant's operations.

Electronic Arts surged 14.9 percent following a Wall Street Journal report that the videogame maker is nearing a deal to go private.

Oil prices rose, with Brent climbing above $70 per barrel for the first time since August, as tensions mount between NATO countries and Russia, boosting the chances of further sanctions being adopted on Russian energy exports. 

- Key figures at around 2015 GMT -

New York - Dow: UP 0.7 percent at 46,247.29 (close)

New York - S&P 500: UP 0.6 percent at 6,643.70 (close) 

New York - Nasdaq Composite: UP 0.4 percent at 22,484.07 (close)

London - FTSE 100: UP 0.8 percent at 9,284.83 (close) 

Paris - CAC 40: UP 1.0 percent at 7,870.68 (close)

Frankfurt - DAX: UP 0.9 percent at 23,739.47 (close)

Tokyo - Nikkei 225: DOWN 0.9 percent at 45,354.99 (close)

Hong Kong - Hang Seng Index: DOWN 1.4 percent at 26,128.20 (close)

Shanghai - Composite: DOWN 0.7 percent at 3,828.11 (close)

Euro/dollar: UP at $1.1701 from $1.1666 on Thursday

Pound/dollar: UP at $1.3405 from $1.3345

Dollar/yen: UP at 149.51 yen from 149.80 yen

Euro/pound: DOWN at 87.30 pence from 87.42 pence

Brent North Sea Crude: UP 1.0 percent at $70.13 per barrel

West Texas Intermediate: UP 1.1 percent at $65.72 per barrel

burs-jmb/ksb