04/02/2025 Daily Reports
Stock Futures and Oil Decline
- S&P 500 futures fell 0.4%, while Nasdaq 100 futures declined 0.3%.
- West Texas Intermediate (WTI) oil dropped 1.6%, reacting to the renewed trade tensions.
China Strikes Back with Tariffs & Investigations
- China announced new tariffs on US goods as retaliation for the 10% US levy that took effect.
- Beijing also launched an antitrust investigation into Google, escalating the economic conflict.
Trump’s Tariff Strategy Creates Market Uncertainty
- The deferral of tariffs on Canada and Mexico signaled Trump’s willingness to negotiate.
- However, China’s immediate retaliation raises doubts about a quick resolution.
Federal Reserve Officials Caution on Economic Risks
- Chicago Fed President Austan Goolsbee urged a careful approach to rate cuts amid rising uncertainty.
- Several Fed officials, including Raphael Bostic and Philip Jefferson, are set to speak this week.
Volatility Expected as Markets React
- The offshore yuan weakened, along with other Asian currencies.
- Bitcoin and Ethereum also tumbled, reflecting broader risk aversion.
- Investors are awaiting key economic data, including US factory orders, trade figures, and jobless claims.
What’s Next?
- The current escalation in trade tensions is a reminder that geopolitical risks remain a major factor in market movements.
- With both the US and China unwilling to back down, the risk of prolonged market instability is increasing.
If diplomatic progress is not made soon, global supply chains, corporate earnings, and overall economic growth could take a serious hit.
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Markets See Tariff Delay as a Negotiation Signal, but Uncertainty Remains
- Donald Trump aims to reshape the country’s trade policy using one of his preferred economic tools: tariffs. He announced that tariffs would be imposed starting on Tuesday — 25% on imports from Canada and Mexico, and 10% on imports from China. However, following talks with the leaders of both Mexico and Canada, the tariffs were delayed by one month. Trump is also set to meet with Chinese President Xi Jinping this week, but the tariffs on China are still set to take effect on Tuesday.
- President Donald Trump’s decision to postpone tariffs on Canada and Mexico by one month has been interpreted as a sign that trade policies may still be negotiated, possibly even with China. In response, Canada and Mexico pledged stricter border enforcement, easing some investor concerns.
– Hong Kong stocks hit a two-month high on optimism that China—facing a 10% tariff—might seek a trade deal. The euro rebounded sharply as fears of an immediate trade war subsided.
– Despite the relief, uncertainty remains. European stock futures saw only modest gains, and attention now shifts to corporate earnings and Trump’s upcoming call with Chinese President Xi Jinping, which could influence future trade policies.
