Global stock markets in Asia ascend, influenced by China's potential acceptance of American proposals regarding Trump's tariffs.
Asian markets soared Friday as China's Commerce Ministry hinted at possible negotiations over Donald Trump's tariffs.
Futures and crude oil prices surged.
Hong Kong's Hang Seng rocketed 1.8% to 22,518.32 while Shanghai markets were closed for a holiday. Taiwan's benchmark jumped a whopping 2.7%.
According to an anonymous Commerce Ministry spokesperson, China has acknowledged statements from senior U.S. officials expressing a readiness to discuss tariffs. The spokesperson stated that China is currently evaluating overtures from the U.S.
"Meanwhile, the U.S. has recently communicated several times with the Chinese side through various channels, expressing a desire to talk with us," it was quoted as saying.
Tokyo's Nikkei 225 picked up 1%, reaching 36,830.69, while South Korea's Kospi saw a slight increase of 0.1% to 2,558.84.
Australia's S&P/ASX 200 added 1.1%, closing at 8,238.00.
Wall Street experienced growth on Thursday, with Microsoft and Meta Platforms leading the charge. Their massive profits for the start of the year surpassed analysts' expectations.
The S&P 500 climbed 0.6% for an eighth straight win, reaching 5,604.14 – its longest winning streak since last August.
The Dow Jones Industrial Average increased 0.2% to 40,752.96, and the Nasdaq composite climbed 1.5% to 17,710.74.
Microsoft rallied 7.6% as the software giant reported exceptional strength in its cloud computing and artificial intelligence businesses – driving overall revenue up 13% from the previous year.
Meta, the parent company of Facebook and Instagram, also exceeded expectations for revenue and profit in the latest quarter. AI tools boosted its advertising revenue, causing its stock to climb 4.2%.
Several other companies doubled down on better-than-expected profit reports, bolstering Wall Street over the past week. The S&P 500 is back within 8.8% of its record set earlier this year.
Yet, uncertainties persist regarding the economic implications of Trump's trade war and potential plunge into recession.
General Motors dipped 0.4% after reducing its forecast for 2025 profit, attributing a predicted $4 billion to $5 billion hit due to tariffs. They expect to mitigate at least 30% of this damage.
McDonald's lost 1.9% after reporting weaker revenue for the latest quarter than analysts anticipated, despite a slight profit above predictions. McDonald's, along with chains like Chipotle, has seen customers grow cautious about the economy and inflation.
Consumer despair about the economy's future is on the rise. On Thursday, reports on the economy were mixed, building upon recent updates suggesting a slowdown.
The first of these reports indicated that more U.S. workers filed for unemployment benefits last week than economists had projected, signaling a weaker job market ahead.
The dread on Wall Street stems from the prospect of a downside scenario called "stagflation," characterized by economic stagnation amid ongoing inflation. This predicament poses a challenge for the Federal Reserve, as it lacks appropriate tools to resolve both issues simultaneously.
If the Fed were to address one issue by adjusting interest rates, it might exacerbate the other.
Treasury yields fluctuated following Thursday's economic reports. The yield on the 10-year Treasury initially plummeted below 4.13% after the more disheartening update on joblessness. However, it later trimmed its losses and climbed to 4.21%, an increase from 4.17% the previous day.
Hopes that Trump may eventually rescind some of his tariffs following trade deals with other nations lent support to markets.
In other dealings early Friday, U.S. benchmark crude oil gained 41 cents to $59.65 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the international standard, rose 36 cents to $62.49 per barrel.
The U.S. dollar weakened to 145.23 Japanese yen from 145.40 yen. The euro edged higher, to $1.1319 from $1.1292.
Between 2020 and 2023, negotiations over tariffs took a rocky road. While China only managed to meet about 60% of its commitments from the 2020 Phase One deal, most Trump-era tariffs still remained in place.
During President Biden's administration, efforts to review and adjust these tariffs progressed slowly, with limited adjustments made and tensions escalating over tech aggression, intellectual property theft, and market access issues.
In recent months, dialogue has resumed between the U.S. and China, but significant developments are yet to emerge. Meanwhile, China has retaliated with sanctions on U.S. exports and restrictions on rare earth exports.
It remains unclear whether Trump's trade war will force the economy into recession or if there will be a reduction in tariffs. Consumers are growing increasingly pessimistic about the economy and inflation, as reflected in the recent unemployment benefit claims and consumer surveys.
- The Asian markets soared Friday, with Hong Kong's Hang Seng, Taiwan's benchmark, and Tokyo's Nikkei 225 recording significant gains.
- These growths followed hints from China's Commerce Ministry regarding possible tariff negotiations with the US, which has expressed a readiness to discuss trade issues.
- The tech sector, notably Microsoft and Meta Platforms, reported exceptional profits, contributing to the surge on Wall Street.
- However, the S&P 500's growth streak does not erase uncertainties about the economic implications of Trump's tariffs and potential recession.
- General Motors and McDonald's reported weaker-than-expected revenue and profit, attributing some of the deficits to tariffs.
- Consumer despair about the economy's future is on the rise, as reflected in recent unemployment benefit claims and consumer surveys.
- The prospect of a downside scenario called "stagflation," characterized by economic stagnation amid ongoing inflation, poses a challenge for the Federal Reserve.
