US open: Stocks start lower following Trump's newest round of tariffs

US stocks opened lower on Thursday as better than expected spending data were offset by fears of an oncoming trade war following the White House's newest round of tariffs.

As of 1600 BST, the Dow was down 0.97% to 24,428.35, while the S&P 500 lost 0.45% and the Nasdaq dropped 0.11%.

The US will impose tariffs on steel and aluminium imports from Canada, Mexico and the European Union from Friday, the White House said on Thursday.

Those levies of 25% on steel imports and 10% on aluminium were originally announced by the President back in March, but Canada and Mexico had been granted an exemption while US officials renegotiated the North American Free Trade Agreement.

They were expected to be met with retaliatory measures against US products, including motorcycles, jeans and bourbon.

Connor Campbell, a financial analysts at SpreadEx, said, "With the petulant President still flip-flopping on his attitudes towards China, the US/North Korea relationship on rocky ground, and Italy and Spain in the midst of political crises, investors really weren't in the mood for another set of trade tensions to emerge."

"Yet Trump marches to the beat of his own drum, with his administration announcing that tariffs on steel and aluminium imports from the EU, Canada and Mexico will come into effect at midnight.

"While the markets avoided the kind of bloody losses that have greeted previous tariff updates, it's not like they took the news in their stride either," he concluded.

In currency news, the US dollar wrapped up a second straight day of losses after the euro was boosted by better-than-expected inflation numbers that balanced out trade-war worries and Italian political concerns.

The ICE US Dollar Index was off 0.1% at 94.063, after dropping 0.8% a day earlier.

Earlier, data from the Department of Commerce showed nominal spending rose 0.6% in April, above the consensus of 0.4%, with March spending data revised up to 0.5%, representing a meaningful acceleration over January and February.

With the deflator up 0.2%, as expected, real spending rose a hefty 0.4%, double the consensus of 0.2%. The core personal consumption expenditure deflator rose 0.2%, above the consensus of 0.1%.

On the income side of the report, April personal income was shown to have risen 0.3% month-on-month, in line with consensus, as disposable income rose by 0.4% and compensation rose by 0.3%.

Although the core PCE deflator is on track to hit the 2% target in July and then to nudge above it in August, Federal Reserve officials have made it clear that this alone will not prompt a policy response as the inflation target is 'symmetric'.

"At this point, we don't see much to worry about, especially with hospital services prices calming down after a run of big increases. The Fed will continue to tighten on the basis of heading off future inflation risk, not because the near-term data are about to become alarming," analysts at Pantheon Economics said.

Elsewhere, new applications for US unemployment benefits fell more than expected last week.

Initial claims for state unemployment benefits fell by 13,000 to a seasonally adjusted 221,000, the Labor Department said on Thursday. Claims data for the prior week was unrevised.

Lastly, the National Association of Realtors' pending home sales index decreased to 106.4, down 1.3% from March, which was also revised to 107.8 from 107.6, and falling significantly short of the 0.4% rise forecast by economists.

Pending home contracts, a forward-looking indicator of the health of the housing market fell 2.1% year-on-year.

In corporate news, Micron fell 5.32% after the semiconductor manufacturer was downgraded to 'equal weight' at Morgan Stanley and technology firm Siena lost 3.41% after revealing an earnings miss.

Kirkland shot up 15% after the home decor retailer reported first-quarter that came in ahead of expectations and transportation company Brink claimed 13.09% after it provided an upbeat outlook as part of its announcement that it bought cash-management business Dunbar Armored for $520m.