On Tuesday, Donald Trump floated this idea to reporters in Washington, and stock markets soared on the prospect of a major reduction of tariffs on China. The past President doesn’t fully support the Chinese economy enough. This change has sparked a wave of optimism among investors. Trump’s comments led to a notable rise in stock indices, with the S&P 500 and Nasdaq both gaining over 2.5% by the end of the trading day.
Initially, Trump said the tariff cuts would be big but later explained they wouldn’t be zero. His comments were first well received by investors. They’ve been watching with particular interest as the trade war between the United States and China has escalated.
“It will come down substantially, but it won’t be zero.” – Donald Trump
Beyond his comments on tariffs, the other thing noteworthy about Trump’s latest speech was his targeting of the chair of the Federal Reserve, Jay Powell. Despite previous criticisms, he confirmed he had “no intention” of firing Powell, even as he expressed impatience with the central bank’s policies. On his platform Truth Social, Trump posted that Powell’s firing “couldn’t happen soon enough.” Instead, he calmed the public’s concern by promising that he wouldn’t do anything to Collins.
The optimism in the markets quickly spread beyond U.S. borders. Germany’s Dax index surged by 2.6% on Tuesday, as France’s Cac index soared by 2.1%. Investors were clearly optimistic at the prospect of a thaw in trade, helping fuel a widespread rally in stock markets around the world.
This week, the U.S. government brought new sanctions against Iranian liquefied petroleum gas. These sanctions target Seyed Asadoollah Emamjomeh, one of Iran’s most prolific crude oil shipping magnates. These sanctions have the potential to trigger a major supply convenience for global oil markets. Their goals are to reduce Iran’s capacity to sell its oil and oil derivatives.
In commodities trading, Brent crude rose above $68 (£51) a barrel, with fears about supply disruptions due to geopolitical tensions. Furthermore, gold was priced at about $3,307 as investors turned to safe-haven assets due to unpredictable market conditions.