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Sentiment improves on potential easing of trade tensions

Market sentiment improved with solid gains on Wall Street after US Treasury Secretary sees potential for a trade deal with China and US President Donald Trump retracted his remarks about dismissing Federal Reserve Chair Jerome Powell. Trump stated he had "no intention" of firing Powell. Asian stock markets showed mixed performances on Thursday, responding to positive signals from the US-China trade negotiations.

  • Date
  • Author Alessandro Fezzi, LGT Research Content & Publications
  • Reading time 5 minutes

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The Dow Jones Industrial Average closed 400 points higher on Wednesday, reflecting a 1% gain, driven by optimism about easing US-China trade tensions. President Trump’s comments suggesting a reduction in tariffs and his assurance of not removing Fed Chair Powell buoyed investor sentiment. However, the index retreated from its earlier session peak of 1100 points. The S&P 500 and Nasdaq Composite also posted significant gains of 1.7% and 2.5%, respectively. The yield on the ten-year US Treasury stands currently at 4.35%.

US Treasury Secretary sees trade deal opportunity

US Treasury Secretary Scott Bessent stated on Wednesday that there is a significant opportunity for a trade agreement between the US and China. Speaking at the Institute of International Trade and Finance in Washington, Bessent emphasized the need for both nations to collaborate on rebalancing trade. He also criticised the World Bank for continuing to lend to economically advanced countries like China, arguing that this practice diverts resources from more critical needs and discourages private sector growth. Bessent called for reforms to ensure the World Bank and IMF remain true to their original missions.

Asia-Pacific markets mixed as trade tensions ease

Asian stock markets showed mixed performances on Thursday, responding to positive signals from the US-China trade negotiations. Japan’s Nikkei 225 temporarily rose over 1%, closing about 0.5% in the green. South Korea's Kospi fell 0.2%. Meanwhile, South Korea’s GDP contracted by 0.1% in the first quarter of 2025, missing expectations of a 0.1% rise, primarily due to a significant decline in construction activity. Australia’s S&P/ASX 200 rose by 0.8%.

China warns US against coercion

China urged the United States to cease pressure tactics if it seeks a tariff agreement, following President Trump's indication that duties on Chinese goods might be reduced. On Wednesday, Chinese foreign ministry spokesperson Guo Jiakun criticised Washington's "extreme pressure" approach. Additionally, President Xi Jinping highlighted the negative global impacts of tariff wars, following Trump's comments on Tuesday suggesting a more conciliatory stance, aiming for a mutually beneficial deal.

EU fines Apple and Meta for antitrust breaches

The European Union fined Apple and Meta on Wednesday for violating digital competition laws. Apple was fined EUR 500 million for failing to comply with "anti-steering" rules under the Digital Markets Act, while Meta received a EUR 200 million fine for illegally requiring users to consent to data sharing or pay for an ad-free service. Both companies have expressed intent to appeal the fines, criticising the EU's enforcement actions.

European stocks rise on trade optimism and SAP earnings

European markets closed higher on Wednesday, with the Stoxx 600 index gaining 1.8% amid hopes of easing US-China trade tensions. Technology stocks led the rally, increasing by 4%. German software giant SAP's shares surged nearly 11% after reporting a 58% year-on-year rise in first-quarter operating profit on robust cloud demand despite macroeconomic challenges, reaching EUR 2.5 billion.

Corporate news in focus: Quarterly figures from Alphabet, Comcast, Intel, Merck, Nestle, PepsiCo, Roche, Sanofi, T-Mobile US, and Union Pacific.

Economic data in focus: France consumer confidence (08:45), US initial jobless claims and Chicago Fed activity index (14:30), US existing home sales (16:00).

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Publisher: LGT Bank (Switzerland) Ltd., Glärnischstrasse 36, CH-8027 Zurich
Editor: Alessandro Fezzi
Source: LGT Bank (Switzerland) Ltd.