Global markets saw a bounce on Tuesday, with stocks rising 2% and indices rallying globally. The S&P 500 was up 2.4%, while the Dow Jones Industrial Average surged 926 points. Tokyo’s stock market rose 6%, Paris gained 2.5%, and Shanghai increased 1.6%. Despite some volatility, analysts say more swings are likely in financial markets as negotiations between countries continue.
The main question remains: how long will US President Donald Trump keep his tariffs on other countries? Economists fear a recession if the tariffs last, but if they’re lowered through negotiations, the worst-case scenario can be avoided. Hope still exists that negotiations may lead to a deal.
Trump announced that a conversation with South Korea’s acting president helped reach “confines and probability of a great DEAL for both countries.” Japanese stocks led the way after Prime Minister Shigeru Ishiba appointed his trade negotiator for talks with the US, based on an agreement between Ishiba and Trump.
Analysts are cautiously optimistic, but warn that the key to avoiding further escalation lies in de-escalation. China has warned of countermeasures against increased tariffs, set to take effect after midnight.
The US trade representative said he’s spoken with roughly 50 countries, inviting them to negotiate and achieve reciprocity. The ongoing trade war is a significant threat to globalization and prices on store shelves.
A bounce back for global markets shouldn’t be a surprise, as stocks have historically rebounded after worst days. Financial advisers suggest avoiding market timing and selling long-term investments when nervous, due to the risk of missing out on huge up days.
Source: https://apnews.com/article/stocks-markets-tariffs-china-trump-b686ef0259c2f4894f9fcd1f3649a956