LONDON, March 26 (Reuters) - Stocks fell and the U.S. dollar edged higher on Wednesday, as nervy traders awaited clarity on President Donald Trump's trade policy ahead of a new round of tariffs next week.
European stocks (.STOXX), turned negative after making slim gains in early trading, and were last down 0.5%. The healthcare (.SXDP), and autos (.SXAP), sectors both fell 1.4%.
Nevertheless, the STOXX 600 remains on track for its best quarter in two years, buoyed by hopes that a German spending package could spur growth.
Investors were clinging to hopes of flexibility from the White House after Trump said on Monday that not all trade levies would come on the April 2 deadline, and that some countries would get breaks, without providing details.
At the same time, Trump opened a new front in his trade war with a directive for 25% secondary tariffs on any country that buys oil or gas from Venezuela. In turn, oil prices rose, although the impact was offset by relief from Black Sea maritime security deals struck by the U.S. in the war in Ukraine.
Meanwhile, the U.S. dollar index , which measures the currency against a basket of six major peers, inched higher after slipping 0.1% on Tuesday, its first losing session in about a week.
The index plumbed a five-month low last week, weighed down by worries that Trump's trade war could trigger a U.S. recession. It is set for a drop of 4% this quarter.
Data on Tuesday showed U.S. consumer confidence plunged to the lowest level in more than four years this month, with households fearing a recession in the future.
Wall Street was set for a nervy start, too, futures gauges showed. The S&P 500 (.SPX), had squeezed out a 0.16% gain on Tuesday.
Investors said markets were on tenterhooks for any signs that the hit to the global economy from Trump's tariffs would be less than feared.
"Trump has been sounding a bit more targeted in terms of tariffs," said Fleura Shiyanova, fundamental analyst at Swiss asset manager Unigestion. "If we can minimise the amount of negative news, this could be a potentially positive catalyst."
Brent crude futures extended gains through the European morning, and were last up 0.9% at $73.64 a barrel. U.S. West Texas Intermediate crude futures added 0.9% to $69.62 a barrel.
Earlier, Japan's Nikkei (.N225), advanced 0.7%, while mainland Chinese blue chips (.CSI300), slipped 0.3%.
BRITISH FOCUS
Elsewhere, the British pound and government bond yields fell after data showed UK inflation slowed to an annual rate of 2.8% in February from 3% a month earlier, slightly below market expectations.
Economists said that inflation remained stubborn, with the Bank of England set for a gradual easing of interest rates.
"The good news is that today’s data should provide the BoE a path to continue with its gradual dial down of restrictive policy," said Sanjay Rata, chief UK economist at Deutsche Bank Research.
British markets are in focus with finance minister Rachel Reeves set to announce cuts to her spending plans later on Wednesday in an attempt to show investors that she can be trusted to fix the public finances as growth falters.
The pound was last down 0.3% versus the dollar at $1.2904 having traded at $1.2940 before the inflation data. It weakened against the euro, too, with the common currency last up 0.3% at 83.65 pence.
Reporting by Tom Wilson in London and Kevin Buckland in Tokyo. Editing by Sharon Singleton and Mark Potter
