Trump continues to say positive things - just now suggesting that they are very close to a deal with Japan on tariffs. But it is China where the bulk of uncertainty lies. He has been quite upbeat this week, but China continues to push back against the optimism.
European indices extended their gains, buoyed by the previous day’s upbeat mood, while US futures have given up their earlier gains. The shift likely linked to an interesting interview US President Donald Trump gave to Time Magazine.
While Trump claimed Chinese President Xi had personally rung him — and insisted that negotiations with Beijing were progressing — it was his remark that he’d consider “50% tariffs a year from now” to be a success that seemed to spook investors. Unsurprisingly, that struck a more hawkish tone, nudging some traders to lock in profits.
Earlier in the session, risk appetite had been given a lift after reports surfaced that China was weighing tariff exemptions for select US imports. This, combined with upbeat comments from Trump the day before and a solid set of earnings from Alphabet, helped extend the rally in equities.
Gold, meanwhile, gave back some ground — dipping below the $3,300 mark — as safe haven demand cooled in response to the renewed optimism. Yet, beneath the surface, caution remains palpable. Trump’s off-the-cuff comment about 50% tariffs a year from now served as a stark reminder that nothing is set in stone, and that the trade saga is far from over.
As such, while some of the worst risk-off flows may be behind us, it’s far too soon to declare an end to the market turmoil. A period of consolidation — both in equities and gold — may now be on the cards.
Meanwhile the S&P 500 has entered a key area of resistance between 5490 to 5550 area. A bearish trend line also comes into play. A clean break should be positive from a short-term point of view, while a sharp rejection is what the bears would be looking for.
By Fawad Razaqzada, market analyst with FOREX.com
European indices extended their gains, buoyed by the previous day’s upbeat mood, while US futures have given up their earlier gains. The shift likely linked to an interesting interview US President Donald Trump gave to Time Magazine.
While Trump claimed Chinese President Xi had personally rung him — and insisted that negotiations with Beijing were progressing — it was his remark that he’d consider “50% tariffs a year from now” to be a success that seemed to spook investors. Unsurprisingly, that struck a more hawkish tone, nudging some traders to lock in profits.
Earlier in the session, risk appetite had been given a lift after reports surfaced that China was weighing tariff exemptions for select US imports. This, combined with upbeat comments from Trump the day before and a solid set of earnings from Alphabet, helped extend the rally in equities.
Gold, meanwhile, gave back some ground — dipping below the $3,300 mark — as safe haven demand cooled in response to the renewed optimism. Yet, beneath the surface, caution remains palpable. Trump’s off-the-cuff comment about 50% tariffs a year from now served as a stark reminder that nothing is set in stone, and that the trade saga is far from over.
As such, while some of the worst risk-off flows may be behind us, it’s far too soon to declare an end to the market turmoil. A period of consolidation — both in equities and gold — may now be on the cards.
Meanwhile the S&P 500 has entered a key area of resistance between 5490 to 5550 area. A bearish trend line also comes into play. A clean break should be positive from a short-term point of view, while a sharp rejection is what the bears would be looking for.
By Fawad Razaqzada, market analyst with FOREX.com
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.