Global Markets Rally as Trump Signals Substantial China Tariff Reduction

Stock markets worldwide experienced significant gains Wednesday following Donald Trump’s announcement that tariffs on Chinese goods would be reduced “substantially”. The former US president’s remarks, coupled with his commitment not to dismiss Federal Reserve Chair Jay Powell, sparked a notable surge in investor confidence.

The positive sentiment initiated on Wall Street, where the S&P 500 and Nasdaq indices closed more than 2.5% higher. The optimistic mood rippled through Asian markets, with Japan’s Nikkei rising nearly 2%, Hong Kong’s Hang Seng climbing 2.4%, and South Korea’s Kospi advancing 1.6%.

European markets embraced the momentum, as the UK’s FTSE 100 gained 1.6%, Germany’s DAX surged 2.6%, and France’s CAC rose 2.1%. The Italian FTSE MiB showed a modest increase of 1.1%.

Market stability was reinforced by Trump’s reassurance regarding Powell’s position at the Federal Reserve, effectively reversing previous day’s losses triggered by his critical remarks about the central bank chief. The US dollar recovered from a three-year low, appreciating 0.25% against major currencies.

The commodities sector responded positively, with Brent crude rising above £51 per barrel. Gold, traditionally viewed as a safe-haven asset, retreated from its Tuesday peak of £2,620 per ounce to trade at approximately £2,480.

The prospect of reduced trade tensions between the world’s two largest economies has provided a welcome boost to global markets, although analysts remain cautious about the implementation timeline and specific details of any potential trade agreement.