On Monday in Sydney, Wall Street stock futures rose, and the dollar strengthened against safe-haven currencies, driven by optimism over U.S.-China trade talks that suggested a potential avoidance of a global recession, despite a lack of specific details. Geopolitical tensions appeared to be easing, marked by a fragile ceasefire between India and Pakistan and Ukrainian President Volodymyr Zelenskyy’s willingness to meet with Russian President Vladimir Putin in Turkey for discussions.
In Geneva, U.S. Treasury Secretary Scott Bessent announced “substantial progress” in trade negotiations, while Chinese officials acknowledged reaching an “important consensus” and establishing a new economic dialogue forum. A joint statement from both sides was expected, although neither explicitly addressed tariff rates. Michael Brown, a senior research strategist at Pepperstone, noted that while this progress created a broader framework for future talks, concrete agreements remain elusive, particularly regarding the status of tariffs.
Investors are looking to the White House for potential reductions of the current 145% tariff on Chinese goods, possibly back to a previously suggested 60%. However, former President Trump seems committed to maintaining high tariffs, which could hinder economic growth and raise prices. The news spurred market activity, with the S&P 500 futures climbing 1.2%, Nasdaq futures increasing by 1.4%, and European indices like EUROSTOXX 50, FTSE, and DAX seeing gains.
In Asia, Japan’s Nikkei and South Korea’s Kospi reported modest increases, while Chinese blue chips rose 0.8% despite recent data showing significant declines in factory-gate and consumer prices. The dollar also appreciated against the yen and the euro but slipped slightly against the Chinese yuan, reflecting fluctuating market sentiments.
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