Trade tensions ease with US-China deal, world markets and dollar rise; positive.

From Yahoo Finance: 2025-05-12 07:01:00

Financial markets and the Federal Reserve are grappling with trade policy shifts and opaque economic data. Uncertainty looms as the recent market rally is questioned – is it a temporary lull or genuine easing of pressures? U.S. and China agree to slash reciprocal tariffs, easing trade war tensions. Trump vows to cut prescription prices by 30%-80%. India and Pakistan discuss next steps for ceasefire. China’s crude oil imports rise, but fuel demand remains uncertain. Asset managers advise holding high cash levels in uncertain times.

Wall Street and dollar surge as U.S. and China agree to cut tariffs for 90 days. Markets react positively to unexpected news, with S&P 500 futures climbing almost 3%. European stocks and Hong Kong stocks also see gains. Dollar index rises, euro and yen weaken. Crude oil prices jump, Bitcoin hits highest level since January. Gold falls 3% amid geopolitical developments.

Ukraine’s President Zelenskiy willing to meet Putin in Turkey, following U.S. President Trump’s advice. Ceasefire holds between India and Pakistan. PKK militant group in Turkey decides to disband. Trade optimism dominates, retail and inflation data to be released later in the week. U.S. drugmakers’ shares fall after Trump pledges to cut prescription prices.

U.S. and China trade deal boosts world stock markets and dollar. Chart shows decline in trade policy uncertainty from April highs. Events to watch include U.S. April Federal budget, Fed Governor and Bank of England policymakers’ speeches, Eurogroup finance ministers meeting, and U.S. corporate earnings reports. Opinions expressed are those of the author.



Read more at Yahoo Finance: Trade peace in our time?