United States
Wall Street surged overnight as investors bet that the Federal Reserve may be forced to cut rates sooner than expected to cushion the economic fallout from President Donald Trump’s escalating trade war with China. The S&P 500 rose 2%, reaching its highest level since the tariff announcements, while the Nasdaq 100 jumped 2.8% and the Dow Jones Industrial Average added 1.2%. Despite Beijing denying any ongoing negotiations, Trump claimed talks between the two nations are continuing. Markets interpreted this as a signal that policy flexibility remains possible.
Bond yields fell sharply, reflecting growing expectations that the Fed could move as early as June. Fed Governor Christopher Waller indicated support for rate cuts should the labour market weaken, a view echoed by Cleveland Fed President Beth Hammack. Corporate earnings offered a mixed picture, with Alphabet rallying in late trading on strong results, while Intel weighed on sentiment with a soft forecast.
American Airlines withdrew its full-year earnings guidance, joining a growing list of companies including Southwest Airlines, PepsiCo, and Procter & Gamble that are turning cautious on their outlooks due to rising costs and economic uncertainty. Durable goods orders also showed only marginal growth, further highlighting business hesitancy. Strategists remain divided on the outlook, with Deutsche Bank cutting its S&P 500 year-end target to 6,150 and forecasting a 5% earnings decline for the year. The 5,500 level remains a key technical resistance for the S&P 500, with several analysts suggesting a breakout above this point could confirm the next leg of the rally.
Europe
European equities recovered from early declines to close higher, supported by strength in auto stocks after upbeat sales data and optimism that car parts may be excluded from Trump’s tariffs on Chinese imports. The Stoxx Europe 600 rose 0.4%, reversing a drop of as much as 0.8% earlier in the session.
French automaker Renault gained 4% after growing first-quarter sales, while Adidas rose on better-than-expected earnings as consumer demand for retro sneakers remained resilient. Banks weighed on the broader index, led by BNP Paribas, which fell 2.2% following a decline in first-quarter profit. Nokia slumped 9% after warning that tariff pressures would make meeting its upper guidance range more challenging. Despite Thursday’s bounce, the Stoxx 600 remains roughly 8% below its March highs, with sentiment still fragile amid ongoing trade uncertainty.
Australia
The Australian sharemarket is set to open higher following the global rebound, with ASX 200 futures up 0.9% although the local market will be closed today for the ANZAC day public holiday, resuming trading on Monday. The S&P/ASX 200 posted its best weekly gain of the year, closing 0.6% higher at 7,968.2 on Thursday and up 2.3% for the week. Optimism that the U.S. may soften tariff measures against China helped drive risk appetite locally.
Healthcare stocks led the advance, while banks also extended their gains, with Westpac up 1.1%, ANZ rising 1.6%, and CBA gaining 0.6%. Gold miners tracked a recovery in bullion prices, with Emerald Resources up 3.3% and Newmont rising 3.5%. Uranium stocks continued their rally, led by Paladin Energy’s 12.1% surge following record quarterly production, with Boss Energy and Deep Yellow also notching solid gains. Oil producers underperformed amid weaker crude prices, with Woodside falling 2%. In other notable moves, ResMed jumped 8.5% after confirming a tariff exemption, while Generation Development slumped 14.9% on a disappointing trading update.
Commodities
Commodity markets were mixed as gold prices rebounded on safe-haven demand, while oil prices edged higher despite ongoing discussions within OPEC+ about potential supply increases. West Texas Intermediate crude rose 0.7% to USD 62.71 per barrel, and spot gold climbed 1.6% to USD 3,340.33 an ounce. The U.S. dollar softened, with the Bloomberg Dollar Spot Index down 0.4%. The euro rose 0.6% to USD 1.1384, the British pound added 0.6% to USD 1.3338, and the Japanese yen strengthened 0.5% to 142.72 per dollar. In cryptocurrencies, Bitcoin held steady near USD 93,595, while Ether declined 1.8% to USD 1,763.70.
Economic Calendar
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No major data releases
This article was written by Paul Darwell, Rivkin Securities Pty Ltd. Enquiries can be made via [email protected] or by phoning +612 8302 3632.
