A mere three weeks post 'Liberation Day', President Trump soothed investors' fears by indicating some wiggle room on tariffs against Chinese imports; Treasury Secretary Scott Bessent telling investors he believes a trade deal with Beijing can be reached. Stocks, led by tech names, continued extended Tuesday's relief rally, Treasury yields dipped, the US dollar strengthened modestly, Gold retreated, and Bitcoin pushed above US$94,000.
The S&P 500 added +1.5% as the Trump Administration addressed the market's two key concerns by softening its tough talk on tariffs against China and appearing to compromise the independence of the Federal Reserve. The blue chip Dow Jones added +0.8% while the tech-dominated Nasdaq rallied +2.5% as the tech sector led the charge. Stocks did retreat slightly from their early morning highs as it was reported the Trump Administration hasn't offered to bring down tariffs on China on a 'unilateral basis'. The US 2 Year Treasury yield settled at 3.854% while its 10 Year counterpart dipped down to 4.385% after falling nearly -10 bps earlier in the day to below 4.300%. In the wake of recent cautious comments from Fed officials it is increasingly becoming clear that a May rate cut is off the table, with markets now pricing just a 6% chance of a cut at the next meeting. The key corporate news overnight came from Tesla as its results missed analyst expectations by some margin. Even so, shares surged +6.2%, spurred on in part by Trump's softening tariff stance but also by CEO Elon Musk's assurance that he will be spending more time on the company and less on his DOGE commitments. Boeing climbed +5.9% after its first quarter loss was narrower than the street's expectations, helped by a nearly +60% rise in airplane deliveries.
European equities enjoyed a late rally as news filtered through regarding the US' softening stance on tariffs. The pan-European Stoxx 600 gained +1.5%. The UK's FTSE 100 added +1.2%, Germany's DAX continued its fine run, up +2.4%, and France's CAC 40 closed up +2.0%. Earlier in the session, European investors were preoccupied with a slew of earnings reports.. In the German market, SAP soared +10.6% after reporting a +60% year-on-year increase in operating profit. The UK's Reckitt Benckiser finished -5.7% lower, as it missed first-quarter estimates.
Asian and Australasian markets almost all climbed in unison on Wednesday. The Shanghai Composite (-0.1%) was the exception, as it closed a shade lower. Hong Kong's Hang Seng (+2.4%), India's BSE Sensex (+0.7%), Japan's Nikkei 225 (+1.9%), and Korea's Kospi (+1.6%) all shifted higher. The ASX 200 gained +1.3% as it was led by resources companies such as Santos (+6.1%), tech names Seek (+6.2%) and WiseTech (+5.5%), and Macquarie (+5.3%) following its announcement of a divestment from its North American and European public asset management unit. The NZX 50 added +1.0%, Gentrack (+6.5%) was the best of the bunch.