Global markets bounced back on Tuesday after US President Donald Trump signaled a shift in tone on both China tariffs and monetary policy. He promised a “substantial” but not total reduction in tariffs on Chinese goods, which calmed investor nerves after a rocky start to the week.
Wall Street rebounded with the Dow up 1.13%, the S&P 500 rising 1.51%, and the Nasdaq gaining 1.76%, reversing Monday’s losses and lifting sentiment across the board.
The dollar index surged over 1% to 99.25, pulling EUR/USD down below 1.14 after briefly touching a post-2021 high above 1.15. Long-dated Treasury yields also moved higher, with the 10-year at 4.35% and the 30-year at 4.8%. Two-year yields rose six basis points to 3.8% as markets dialed back expectations for rapid rate cuts.
Meanwhile, gold futures fell from $3,510 to $3,355 per ounce, as investors cashed in on a record-breaking rally. In contrast, Bitcoin jumped 6.25% to trade above $93,400, extending its strong performance and cementing support above $84,000.
Asian equities mirrored the US rally, with Hong Kong’s Hang Seng up 2.4%, Japan’s Nikkei 225 climbing 1.91%, and South Korea’s Kospi and Australia’s ASX 200 rising 1.54% and 1.41%, respectively.
European futures also pointed higher, with the Euro Stoxx 50 up 1.73% and Germany’s DAX gaining 2.49%.
What Does This Mean for Me?
While the recovery may be fragile, Trump’s pivot has temporarily shifted momentum in favor of risk assets, giving investors a reason to breathe, at least for now.