Risk Sentiment Cools on Wall Street, Trump's Tariff Pause Boosts Asian Markets
🇺🇸 S&P 500 Index: -3.46% 📉
🇺🇸 Nasdaq Index: -4.31% 📉
🇪🇺 STOXX 600 Index: 3.70% 📈
🇯🇵 Nikkei 225 Index: 9.13% 📈
🇭🇰 Hang Seng Index: 2.06% 📈
🇨🇳 CSI 300 Index: 1.31% 📈
🇸🇬 Straits Times Index: 5.43% 📈
U.S. stock markets saw a sharp sell-off, with the S&P 500 and Nasdaq dropping by -3.5% and -4.3% respectively, as fears mount that the escalating U.S.-China trade war could cause long-term damage to global economic growth. The White House announced tariffs on Chinese goods would rise to 145%, further dampening investor confidence.
U.S. core CPI growth slowed to 2.8% year-over-year in March 2025 (vs. expected 3.0%), down from 3.1% in February. This suggests inflation has temporarily eased before tariff pressures fully materialize, offering consumers some breathing room.
For the week ending April 5, U.S. initial jobless claims rose slightly by 4,000 to 223,000, in line with expectations. Although layoffs remain low, slower hiring has extended the time it takes for the unemployed to find new jobs.
Asia-Pacific markets continued to rally, with the Hang Seng Index and CSI 300 Index rising 2.1% and 1.3% respectively, boosted by President Trump's announcement of a 90-day suspension of tariffs for most trade partners—excluding China—lifting regional investment sentiment.
Despite ongoing stimulus efforts by the Chinese government, China's CPI in March fell -0.1% year-over-year (vs. expected +0.1%), highlighting persistent deflationary pressure. External shocks from the trade war are expected to exacerbate the downward pressure on prices.
Upcoming Event:
On Friday, markets await the preliminary reading of the University of Michigan Consumer Sentiment Index.
Key Things to Know Today:
1. White House representative Hassett stated that 15 countries have submitted trade proposals, with some entering “deep negotiation phases.” A high-level meeting is expected soon to map out the path forward for trade talks.
Hassett
2. Chicago Fed President Goolsbee warned that tariffs are a “stagflation shock,” as they both raise prices and hurt jobs and economic growth—complicating the Federal Reserve's policy objectives.
Goolsbee
3. The EU announced a 90-day delay in its retaliatory tariffs on U.S. goods worth €21 billion, in response to Trump's suspension of new tariffs on European exports.
EU tariff delay
4. Gold surged 3%, hitting a record high of $3,176 per ounce, while the U.S. dollar dropped more than 1%, as investors flocked to safe-haven assets amid rising global uncertainty. $SPDR Gold Shares(GLD)$
Gold
5. Chinese officials held a high-level meeting to discuss further stimulus in housing, consumption, and tech sectors—highlighting Beijing's heightened alert over the U.S.-China trade war's impact and its efforts to counter mounting economic pressure.
Key Takeaway:
Tariffs remain the primary risk for markets, triggering volatility and long-term inflation pressure. While markets are hoping for inflation to ease, a slowdown caused by trade shocks is far from the ideal path to price stability.
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