US open: Stocks rise but dollar tumbles on Trump comments; Microsoft rallies

US stocks edged higher in early trade on Friday as Microsoft rallied on the back of strong results, while the dollar tumbled against its major rivals after President Trump ramped up his trade war rhetoric.

At 1620 BST, the Dow Jones Industrial Average was 0.2% higher at 25,106.24, the S&P 500 was up 0.1% at 2,808.02 and the Nasdaq was 0.4% firmer at 7,857.78.

Meanwhile, the greenback fell across the board, down 0.7% versus the pound and 0.6% against the yen and the euro after it emerged that Trump had said in an interview with CNBC on Thursday that he was ready to impose tariffs on all $500bn of Chinese imports if China doesn't bow to US complaints about its trade policies.

In the interview, Trump criticised the Federal Reserve's interest rate rises, made it clear he wants a weaker dollar and said he was "ready to go to 500" on Chinese imports.

Capital Economic said: "The US currently plans to impose tariffs on imports from China worth $250bn, out of a total of just over $500bn last year, so this latest threat would represent a significant step up in its protectionist trade policies if enacted.

"Because we go up and every time you go up they want to raise rates again…I am not happy about it," Trump told CNBC. "But at the same time I’m letting them do what they feel is best.

"I don’t like all of this work that we’re putting into the economy and then I see rates going up."

The US President also attacked the European Union and China over their currency weakness.

Still, equities proved fairly resilient in the face of Trump's latest comments.

IG analyst Chris Beauchamp said: "After a few days without trade war headlines the topic has come back to life, as Trump turns the trade war rhetoric all the way up to 11 with his announcement that $500bn of Chinese goods could suffer penalties. Having come away from the NATO summit with an apparent win using his strong-arm negotiating tactics, this move appears designed to bring the Chinese to the table.

"Markets have recovered from their initial shock, perhaps indicating that this kind of newflash is starting to lose its power."

In corporate news, software giant Microsoft rallied after the company's quarterly revenue and profit beat analysts' expectations late on Thursday. Fourth-quarter profit rose to $8.87bn or $1.14 a share, beating a forecast of $1.08 while sales rose 17% to $30.1bn versus expectations of $29.2bn.

The solid performance was driven by an increase in sales for the group's flagship Azure clouding computing business and good growth for its productivity and business processes unit.

Honeywell was also on the front foot after its quarterly profit came in ahead of expectations and the company lifted its 2018 earnings forecast.

On the downside, General Electric retreated after the company said profit dropped 30% in the second quarter on the back of weakness in its power division.

Skechers shares tumbled after the footwear company's second-quarter same-store sales and earnings missed expectations.