Global Markets Rally as Trump Signals Major Tariff Cuts on China
By Staff, Agencies
Markets around the world rebounded sharply after US President Donald Trump indicated that tariffs on Chinese goods would be reduced “substantially,” easing investor concerns over the prolonged US–China trade war.
His remarks, coupled with a softened stance toward Federal Reserve Chair Jerome Powell, boosted stocks, strengthened the US dollar and led to a pullback in gold prices.
During a press event at the White House on Tuesday, Trump clarified that while tariffs on China would not be eliminated entirely, they would be scaled back significantly. The announcement echoed similar comments from Treasury Secretary Scott Bessent, who earlier acknowledged that high tariffs were unsustainable and that a move toward de-escalation was likely.
In a separate Oval Office briefing, Trump dismissed speculation about firing Fed Chair Jerome Powell. “I have no intention of firing him,” Trump said, although he urged the Fed to lower interest rates, calling the present moment “a perfect time” for such action. This tone marked a departure from his earlier criticism on Truth Social, where he had derided Powell as “Mr Too Late, a major loser.”
The President’s statements followed Monday’s sharp market sell-off, a weaker dollar, and falling Treasury prices. Despite the turnaround on Tuesday, many analysts remain cautious about the long-term outlook.
“Participants understandably remain jittery,” noted Michael Brown, a senior strategist at Pepperstone, citing lingering uncertainty around trade policy and questions about the haven status of Treasuries and the dollar.
US stock futures surged after Trump’s comments. The Dow Jones Industrial Average rose 1.13%, the S&P 500 gained 1.51%, and the Nasdaq Composite jumped 1.76%. Asian markets followed the rally, driven by optimism that tensions between Washington and Beijing may ease. The Hang Seng Index in Hong Kong climbed 2.4%, Japan’s Nikkei 225 gained 1.91%, South Korea’s Kospi rose 1.54%, and Australia’s ASX 200 advanced 1.41%.
In currency markets, the US dollar index surged more than 1%, rebounding to 99.25 after briefly hitting a three-year low. As the dollar strengthened, haven currencies like the euro, Swiss franc, and Japanese yen retreated. The EUR/USD pair dropped below 1.14 during Asian trading, down from above 1.15 the day before.
US government bonds also saw a rebound. Yields on the 10-year and 30-year Treasuries rose to 4.35% and 4.8%, respectively, reflecting improved investor confidence. The two-year Treasury yield, which is sensitive to interest rate expectations, increased by 6 basis points to 3.8%, as markets began to anticipate a slower pace of rate cuts from the Fed.
Gold prices tumbled as investors moved away from safe-haven assets. Comex gold futures fell from $3,510 per ounce to $3,355, while spot gold dropped over 4% from Monday’s record high to $3,343 per ounce. Analysts also suggested that gold may have been overbought, prompting profit-taking.
In contrast, Bitcoin continued its bullish run, rising 6.25% in the past 24 hours to trade above $93,400 [€82,000]. The cryptocurrency has held above $84,000 [€73,000] for the past week, demonstrating resilience despite volatility in tech stocks.
European markets are also poised for a strong open. Futures for the Euro Stoxx 50 rose 1.73%, Germany’s DAX climbed 2.49%, and the UK’s FTSE 100 gained 1.1%, all buoyed by improving risk sentiment. Investors now turn their attention to key manufacturing and services PMI data due later in the day.
