Global stocks surged Friday. Signs of possible trade talks between the U.S. and China boosted risk sentiment. This occurred after lackluster earnings results from tech bellwethers Apple and Amazon fueled worries about the impact of a global trade war.
China’s commerce ministry said the United States has repeatedly expressed its willingness to negotiate on tariffs. They added that Beijing’s door is open for talks. This move could ease trade tensions that have roiled global markets.
The comments helped U.S. stock futures reverse course from earlier falls. Apple had trimmed its share buyback program and warned tariffs could add about $900 million in costs this quarter.
Futures for S&P 500 rose 0.8%. Futures for Nasdaq were 0.6% higher.
European stock markets were set for a strong open. Eurostoxx 50 futures were up 1.3%.
MSCI’s broadest index of Asia-Pacific shares outside Japan rose to its highest level since March 25. It recouped all of its losses since U.S. President Donald Trump kicked off a trade war with his tariffs in early April.
Japan’s Nikkei gained over 1%. Taiwan stocks surged 2.4%. Hong Kong’s Hang Seng surged 1.6%. Mainland China markets were closed for a long holiday.
Matt Simpson, senior market analyst at City Index, said “They (China) have struck a cautious tone, demanding that the U.S. ‘show sincerity’ if they want trade talks.” He also stated, “So while olive branch has been offered, you can hardly say China has ‘come crawling’ like Trump had hoped.”
Still, investor sentiment improved on the comments. Markets continue to grapple with President Donald Trump’s erratic tariff policies that have sparked fears of a sharp global economic downturn.
Data this week showed the U.S. economy shrank for the first time in three years in the first quarter. China’s factory activity contracted at the fastest pace in 16 months in April as new tariffs started to bite.
Joseph Capurso, head of international and sustainable economics at Commonwealth Bank of Australia, said the main impact on the economy from tariffs will be felt when consumer prices rise.
U.S. stocks rallied on Thursday. The Dow gained two-tenths of a percent, the S&P 500 added more than six-tenths, and the tech-heavy Nasdaq climbed one-and-a-half percent.
Capurso also stated, “A recession will become likely if the price increases encourage consumers to cut spending and businesses to shrink workforces and cut capital spending. While a recession is not our baseline, it will be a close call this year.”
The earnings season so far has underscored the cost of the rapidly shifting U.S. trade policy. Many companies slashed or pulled their profit forecasts.
Still, investors were disheartened by the earnings from Apple and Amazon. Strong results from Microsoft and Meta Platforms earlier in the week had raised hopes that the tech industry could weather the tariff storm.
In currency markets, the Japanese yen weakened to its lowest level since April 10 in early Asian hours. It was last a bit stronger at 145.26 per U.S. dollar.
The Bank of Japan on Thursday sharply lowered growth forecasts due to U.S. tariffs. They left interest rates on hold, suggesting the central bank could keep policy in a holding pattern for some time.
Fred Neumann, chief Asia economist at HSBC, said the impact of tariff uncertainty on the global economy could pose indirect challenges to growth in Japan.
Neumann also stated, “The BOJ is keeping the door open for further rate hikes, but at this point the door is only slightly ajar.”
That left the U.S. dollar on course for a 0.4% gain for the week. This was ahead of the crucial non-farm payrolls data later in the day. The dollar index, which measures the U.S. currency against six other units, was last slightly lower at 100.02.
A Reuters survey of economists showed nonfarm payrolls likely increased by 130,000 jobs last month. This followed a rise of 228,000 in March.
Japanese Finance Minister Katsunobu Kato said on Friday the country’s huge $1 trillion-plus in U.S. Treasury holdings are among the tools available for Tokyo to use in trade negotiations with the United States.
The remark came as Japan’s top trade negotiator Ryosei Akazawa met with U.S. Treasury Secretary Scott Bessent in Washington for a second round of bilateral tariff talks.
In commodities, gold prices rose to $3,252.11 per ounce on Friday. However, gold was on course for its weakest weekly performance since end of February. Oil prices jumped after Trump threatened secondary sanctions on Iran. Hints of easing trade tensions also contributed, as these would support demand if realized. Brent crude futures rose 0.66%, while U.S. West Texas Intermediate crude futures gained 0.7%.
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