Stocks saw a rebound Tuesday as markets stabilized after last week’s volatility. Optimism grew after U.S. President Donald Trump hinted at easing steep tariffs, giving auto stocks a major lift.
Trump’s possible compromise on trade helped ease investor nerves, particularly around car manufacturers. However, uncertainty persists over future tariffs on tech and pharmaceuticals.
Last week’s announcement of temporary exemptions for electronics such as smartphones, laptops, and semiconductors offered some relief. Still, Trump’s hint that these could be short-term dampened long-term confidence.
U.S. Treasury Secretary Scott Bessent signaled a potential China-U.S. trade deal, calling it an opportunity rather than an inevitability. Meanwhile, Trump aide Kevin Hassett claimed the administration had received over 10 “amazing” trade offers — without naming sources.
Auto stocks surged in Tokyo and Seoul after Trump said he was “very flexible” on supporting car companies affected by his 25% import tariff. Toyota, Mazda, Nissan, and Hyundai all posted gains.
South Korea’s plan to invest an extra $4.9 billion in its semiconductor sector also boosted tech giants Samsung and SK hynix.
Major markets in Asia and Europe generally closed higher, with only Paris showing a slight dip. U.S. Federal Reserve Governor Christopher Waller hinted at possible rate cuts if tariffs drag the economy toward recession.
“In a slowdown, even with inflation above two percent, I’d support rate cuts if the threat of recession grows,” Waller said.
Still, analysts warn that stagflation — slow growth coupled with high inflation — could challenge the Fed’s ability to act effectively.
Market Highlights:
- Tokyo (Nikkei 225): +0.8% to 34,267.54
- Hong Kong (Hang Seng): +0.1% to 21,427.90
- Shanghai (Composite): +0.2% to 3,267.66
- London (FTSE 100): +0.4% to 8,165.43
- Dow Jones: +0.8% to 40,524.79
Currency Watch:
- USD/JPY: 143.25
- EUR/USD: $1.1340
- GBP/USD: $1.3194
Oil Prices:
WTI: $61.92 (+0.6%)
Brent: $65.24 (+0.6%)
