London (AFP) - Global stock markets diverged Wednesday as investors remained cautious following conflicting signals from President Donald Trump about his coming wave of tariffs.

New York’s main indexes opened mixed while shares in Paris and Frankfurt dropped.

London edged up as data showed an unexpected slowdown to UK annual inflation.

With the White House’s “Liberation Day” on April 2 fast approaching, investors are bracing for a wave of sweeping levies on imports amid warnings of crippled global trade, recession and a fresh spike in inflation.

But Trump has alternated between tough talk about imposing tariffs across the board to suggesting he may allow some carve-outs to spare US consumers the full brunt of their impact on prices.

“All the tariff talk uncertainty has led to a sharp drop in confidence,” said David Morrison, analyst at Trade Nation.

“Recent survey data has painted a gloomy outlook for the US economy. But this pessimism has yet to show up in hard data, such as unemployment, while corporate earnings continue to beat expectations,” Morrison added.

The president told Newsmax on Tuesday that he did not “want to have too many exceptions” but added: “I’ll probably be more lenient than reciprocal, because if I was reciprocal, that would be very tough for people.”

The Conference Board reported Tuesday that its closely watched gauge of consumer confidence dived to its lowest level since 2021 – during the Covid pandemic – as concerns grow over higher prices.

The figures come as the Federal Reserve re-evaluates its monetary policy in light of Trump’s tariffs agenda, with some analysts warning it might have to hold off any interest rate cuts this year.

Wall Street’s Dow index was up in morning trading, the wider S&P 500 was unchanged, and the tech-heavy Nasdaq was down slightly.

While almost all European markets were lower in mid-afternoon trading on the tariff uncertainty, defence stocks bucked the trend as one country after another pledges to boost military spending, with Spain and Sweden being the latest to do so Wednesday.

France’s Dassault Aviation and Thales, Germany’s Rheinmetall, and Italy’s Leonardo were all sharply higher.

London’s stock market rose after news that the country’s annual consumer inflation slowed to 2.8 percent in February from 3.0 percent in January.

While that was a boost to finance minister Rachel Reeves, prices later gave up some of their gains after the country’s growth forecast was cut in half to one percent as she announced spending cuts.

Trump’s talk of tariff exemptions had earlier helped some Asian markets edge higher after recent slumps.

Copper futures traded on New York’s Comex exchange touched a record high after Trump said he could impose duties on imports of the commodity within weeks, leading some investors to shift supply to the US to avoid any eventual levies.

- Key figures around 1340 GMT -

New York - Dow: UP 0.4 percent at 42,753.15 points

New York - S&P 500: FLAT at 5,778.45

New York - Nasdaq Composite: DOWN 0.2 percent at 18,230.40

London - FTSE 100: UP 0.2 percent at 8,683.18

Paris - CAC 40: DOWN 0.8 percent at 8,046.20

Frankfurt - DAX: DOWN 0.7 percent at 22,939.11

Tokyo - Nikkei 225: UP 0.7 percent at 38,027.29 (close)

Hong Kong - Hang Seng Index: UP 0.6 percent at 23,483.32 (close)

Shanghai - Composite: FLAT at 3,368.70 (close)

Euro/dollar: DOWN at $1.0772 from $1.0791 on Tuesday

Pound/dollar: DOWN at $1.2875 from $1.2943

Dollar/yen: UP at 150.45 yen from 149.90 yen

Euro/pound: UP at 83.65 pence from 83.37 pence

Brent North Sea Crude: UP 1.0 percent at $73.77 per barrel

West Texas Intermediate: UP 1.0 percent at $69.72 per barrel