Stock futures in the US and Europe rose, fueled by growing optimism that President Donald Trump’s upcoming tariffs may be more targeted than initially anticipated.
Positive Sentiment on Tariff Plans
Futures for both the S&P 500 and Euro Stoxx 50 increased, while Asian stock indices saw a slight decline. The 10-year US Treasury yield rose, and the dollar remained largely unchanged. However, the Turkish lira continued to fall amid ongoing concerns over market instability.
Investors are encouraged by reports suggesting that the next round of US tariffs, set for April 2, could focus on specific countries or industries, rather than the broader, global tariffs that Trump had previously suggested. Despite this optimism, concerns persist as trade officials in China and Australia have warned of potential global economic shocks from US trade policy.
Market Cautious Ahead of Announcement
Khoon Goh, head of Asia research at ANZ Group Holdings, explained that while the news of more targeted tariffs has been well-received, there is still nervousness ahead of next week’s official announcement. He noted that unexpected developments or statements from President Trump could shift the market’s sentiment, making it difficult for investors to fully price in the risks at this stage.
Trump is expected to announce reciprocal tariffs on certain countries or blocs, but officials indicated that some nations might be excluded. Additionally, the administration has no plans to unveil sector-specific tariffs, as Trump had previously hinted.
Global Concerns About Trade Policy
Australia’s Treasurer Jim Chalmers warned that the US administration’s policies could have a “seismic” impact on the global economy. Meanwhile, Chinese Premier Li Qiang stated that China is prepared for “shocks that exceed expectations” as a result of the new trade policies.
Volatility in Turkish Markets
Investors are also keeping a close watch on Turkish assets, as political instability continues to weigh on the market. The arrest of a key opposition politician has heightened concerns, with borrowing costs for the Turkish lira and debt insurance remaining near high levels. Turkey’s central bank held a “technical meeting” with commercial lenders on Sunday in preparation for further volatility, while the country’s market regulator imposed a short-selling ban on stocks.
Corporate and Commodity News
In corporate news, Ant Group Co., backed by Jack Ma, announced it had used Chinese-made semiconductors to develop AI training techniques that could reduce costs by 20%. This development has fueled optimism, contributing to a 26% rise in Chinese technology stocks in Hong Kong this year. Janet Perumal of Wellington Management noted that the launch of DeepSeek’s lower-cost large language model has sparked investor excitement, suggesting potential for further expansion in China’s stock market.
Meanwhile, Indonesia’s stock market continued to struggle, driven by a deteriorating economic outlook. India’s equity market volatility also surged, marking its biggest jump since January.
In commodities, oil prices held steady as traders weighed the impact of US tariffs and anticipated increased supply from OPEC+. Gold traded near $3,022 an ounce, close to its record high reached on Thursday.
Economic Data in Focus
This week, traders will focus on economic activity data from Europe, the UK, and the US to gauge the impact of tariff uncertainties on economic growth. Additionally, inflation data from Australia is due, along with the US Personal Consumption Expenditure (PCE) report, which is the Federal Reserve’s preferred measure of consumer prices.
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