Global stocks continue climb on possible China-US trade ease
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The news: European stocks climbed Wednesday following reports that US President Donald Trump hinted at lower tariffs for China and that his administration is open to a deal with the country.
The numbers: The European Stoxx 600 index was 1.6% higher in mid-session trading, while Germany’s DAX and the CAC 40 were both up over 2%. The UK’s FTSE 100 was on course to extend its best run in two years, up 1.4%.
Shares in German software giant SAP surged 9.5%, on track for its biggest one-day increase in over five years, after the company posted a 58% year-on-year operating profit rise in constant currency for Q1, with revenue rising 11%.
US stock futures also pointed to a higher open on Wednesday, looking to continue gains from the previous session, with the S&P500 e-mini futures rising 2.34%, Dow Jones e-mini futures up 1.75% and the Nasdaq 100 e-mini futures up 2.81% at 10:26pm AEST.
The context: The news comes after Trump told reporters on Tuesday that total tariffs on China’s exports to the US will be lower than the current rate of 145%. He said tariffs on imports from the country would fall significantly following a deal but not to zero, backing earlier remarks by US Treasury Secretary Scott Bessent that the tariff standoff with China is “unsustainable” and he expects the situation to de-escalate.
China responded on Wednesday, with Foreign Ministry spokesperson Guo Jiakun stating that “China’s attitude towards the tariff war launched by the U.S. is quite clear: We don’t want to fight, but we are not afraid of it. If we fight, we will fight to the end; if we talk, the door is wide open.”
Investors also took well to Trump’s admission that he has no plans to fire Federal Reserve chair Jerome Powell on Tuesday, despite wanting interest rates to be lower.
Trump has persistently criticised Powell for not further cutting interest rates since taking office in January and last week ramped up his attacks, posting on social media that Powell's termination as Fed chair "cannot come fast enough," spooking financial markets.
The sources: Capital Brief, WSJ, SAP
