Cautious Gains for Global Markets as Trade Tensions Rise:
Asian and U.S. markets posted mixed performances amid cautious sentiment and anticipation
ahead of major technology companies’ earnings and upcoming economic data,
as trade tensions and tariff policies weigh on investor sentiment.

Content

Asian Markets

U.S. Stocks

Persistent Trade Tensions

Divergent Market Moves
Weaker Dollar

Tech Earnings

Stock Movements

Modest Gains in Asian Markets

Asian stocks recorded limited gains, with the regional index rising by 0.2%,
supported by positive performances in Hong Kong and Australian markets.
Meanwhile, S&P 500 futures fluctuated between slight gains and losses.
The U.S. dollar remained stable, while gold prices declined by 0.6%.
No trading occurred on Asian Treasury bonds due to a public holiday in Tokyo.

These market movements come as the recent U.S. stock rally, which extended for five consecutive days,
faces critical tests with the release of key employment, inflation,
and economic growth data, alongside earnings from major technology companies.

Despite a recent decrease in market volatility, anxiety persists over the
prospect of a global economic slowdown driven by U.S. trade policies under President Donald Trump.

U.S. Stocks Trim Losses

In the U.S., stocks pared earlier losses, supported by bargain hunting and short-covering activities.
The S&P 500 and Nasdaq 100 indices showed little change, while the Dow Jones Industrial Average rose by 0.3%.
The VIX volatility index surpassed the 25-point mark.

American equities swung between gains and losses amid growing concerns about the impact of tariff policies,
especially after the Dallas Federal Reserve’s manufacturing activity index for Texas fell to its lowest level since May 2020,
fueling fears of an economic slowdown.

Persistent Trade Tensions and Firm Positions

Trade tensions remain elevated. Fouad Razaqzada of “City Index” highlighted that trade tensions,
Recession risks and monetary policy uncertainties continue to pressure markets.
Chris Larkin of “E*TRADE” emphasized that sustained stock market gains
would require a significant policy shift from the White House toward China, an outcome that currently seems unlikely.

China reinforced its firm stance through an editorial in the “People’s Daily,”
urging the U.S. to withdraw its tariffs and warning that yielding to pressure would only empower “bullies.”
The Chinese Ministry of Foreign Affairs also reiterated that there are no ongoing talks with Washington regarding tariff reductions.

U.S. Treasury Secretary Scott Pessen confirmed that China is not currently a priority,
The administration is focusing instead on securing trade agreements with 17 other countries.

Divergent Moves Across Stocks and Sectors

The markets saw varied movements, with the Russell 2000 index climbing 0.4%,
outperforming other major benchmarks.
Goldman Sachs‘ unprofitable tech stocks rose by 2.16%, while its basket of most shorted bank stocks gained 1.34%.

Strategists remain divided. JPMorgan’s trading desk adopted a tactically optimistic stance on U.S. stocks,
citing strong earnings and new trade deals as supportive factors.
In contrast, Citi strategists viewed major tech companies listed in the Nasdaq 100
as safer havens than small-cap stocks represented in the Russell 2000.

Additional Support from a Weaker Dollar

According to Michael Wilson from Morgan Stanley, the weakening U.S. dollar will bolster corporate earnings,
giving U.S. stocks a competitive edge over global peers.
Wilson also cited stable earnings growth and higher quality among U.S. companies as reasons for optimism.

Anticipation of Major Tech Earnings

Markets are closely watching this week’s earnings announcements from Microsoft, Apple, Meta Platforms,
and Amazon, amid expectations that the “Big Seven” tech companies will achieve 15% earnings growth in 2025
despite ongoing market volatility stemming from the trade war,
which has erased $5.5 trillion from stock market valuations.

Investors are also awaiting results from companies like NXP Semiconductors and Roper Technologies
to glean further insights into the impact of tariff policies on business performance.

Notable Individual Stock Movements

Boeing shares rose by 2.44% after Airbus agreed to acquire certain assets and sites from
Spirit AeroSystems is paving the way for Boeing’s acquisition of Spirit.

Eli Lilly shares fell by 0.8% following two consecutive downgrades from HSBC,
citing an unattractive risk-reward profile.

Plug Power shares surged 46%, hitting their highest intraday level since 2017,
After the company announced a new $525 million credit facility and strong preliminary first-quarter results.

Cautious Gains for Global Markets as Trade Tensions Rise
underscore the fragile balance between investor optimism and geopolitical risks.

Cautious Gains for Global Markets as Trade Tensions Rise

Cautious Gains for Global Markets as Trade Tensions Rise

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