Markets breathed a cautious sigh on Wednesday—only to tense up again on Thursday. After a strong global rally earlier in the week, stock momentum faltered as mixed messages from the Trump administration about China tariffs left investors guessing.
In Asia, stocks snapped a five-day winning streak. Hong Kong’s benchmark dropped 1.4%, marking its first decline in four sessions. A regional index edged lower as optimism from earlier in the week gave way to caution, and U.S. and European equity futures dipped as well.
The shift came after U.S. Treasury Secretary Scott Bessent cast doubt on the timeline of any trade resolution, suggesting talks with Beijing remain in early stages. Bessent’s comments contradicted President Donald Trump’s earlier hints of a tariff rollback—fueling confusion and slowing down the relief rally.
Currency markets reflected the uncertainty: the yen gained after two days of losses, while the U.S. dollar weakened. Meanwhile, gold surged 1.5%, signaling renewed demand for safe-haven assets as investors backed away from risk.
The volatile market swings come amid growing concern about Trump’s unpredictable approach to trade negotiations and monetary policy. On Wednesday, the president had suggested a fair deal with China could be announced within weeks and hinted at a possible new tariff rate. He also noted the administration is reconsidering steep auto import duties, a move carmakers argue would hurt jobs and profits.
But with no firm commitments and a pattern of contradictory messages, investors are increasingly skeptical.
“It’s his negotiation style,” said Joshua Crabb, head of Asia Pacific equities at Robeco Hong Kong. “You’ve got to stay grounded in fundamentals and understand what’s already priced in. Right now, the margin of safety is everything.”
As markets digest the rollercoaster of trade headlines, it’s clear that volatility is here to stay. While the rally’s pause doesn’t mean a reversal, traders are bracing for more unpredictable turns from Washington—and recalibrating expectations accordingly.
Stock Rally Loses Steam After Mixed Tariff Signals from Trump Administration
Markets breathed a cautious sigh on Wednesday—only to tense up again on Thursday. After a strong global rally earlier in the week, stock momentum faltered as mixed messages from the Trump administration about China tariffs left investors guessing.
In Asia, stocks snapped a five-day winning streak. Hong Kong’s benchmark dropped 1.4%, marking its first decline in four sessions. A regional index edged lower as optimism from earlier in the week gave way to caution, and U.S. and European equity futures dipped as well.
The shift came after U.S. Treasury Secretary Scott Bessent cast doubt on the timeline of any trade resolution, suggesting talks with Beijing remain in early stages. Bessent’s comments contradicted President Donald Trump’s earlier hints of a tariff rollback—fueling confusion and slowing down the relief rally.
Currency markets reflected the uncertainty: the yen gained after two days of losses, while the U.S. dollar weakened. Meanwhile, gold surged 1.5%, signaling renewed demand for safe-haven assets as investors backed away from risk.
The volatile market swings come amid growing concern about Trump’s unpredictable approach to trade negotiations and monetary policy. On Wednesday, the president had suggested a fair deal with China could be announced within weeks and hinted at a possible new tariff rate. He also noted the administration is reconsidering steep auto import duties, a move carmakers argue would hurt jobs and profits.
But with no firm commitments and a pattern of contradictory messages, investors are increasingly skeptical.
“It’s his negotiation style,” said Joshua Crabb, head of Asia Pacific equities at Robeco Hong Kong. “You’ve got to stay grounded in fundamentals and understand what’s already priced in. Right now, the margin of safety is everything.”
As markets digest the rollercoaster of trade headlines, it’s clear that volatility is here to stay. While the rally’s pause doesn’t mean a reversal, traders are bracing for more unpredictable turns from Washington—and recalibrating expectations accordingly.
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