By Atoyebi Nike
Most global markets advanced on Thursday as investors balanced renewed US-China trade tensions with expectations of further interest rate cuts by the Federal Reserve this year.
The week has been volatile since US President Donald Trump threatened to impose 100 percent tariffs on Chinese goods in response to Beijing’s rare-earth export controls. Although he later softened his stance, the threat triggered tit-for-tat measures and raised fears about the fragile trade truce between both countries.
On Wednesday, Trump confirmed to reporters that the two nations were “in a trade war,” saying tariffs were essential to maintain leverage. His Treasury Secretary, Scott Bessent, struck a more conciliatory tone, hinting at a longer pause on tariffs as negotiations continue ahead of the Asia-Pacific Economic Cooperation summit in South Korea, where Trump plans to meet Chinese President Xi Jinping.
Analysts said the contrasting approaches resembled a “good cop, bad cop” strategy. Markets, they noted, were reacting to a mix of anxiety and relief.
Asian stocks mostly rallied following a positive session on Wall Street. Tokyo, Shanghai, Sydney, Seoul, Wellington, Taipei, Mumbai and Bangkok all recorded gains, driven by optimism over more Fed rate cuts. Hong Kong, Singapore and Jakarta saw losses. In Europe, London and Frankfurt opened lower, while Paris edged up.
The US Federal Reserve’s Beige Book survey showed signs of a weaker job market, adding to calls for further rate cuts. Fed Chair Jerome Powell also warned that employment risks had increased.
Meanwhile, uncertainty over trade, inflation, and growth remains. Bank of America economists noted that “risks are not all gone,” citing weak data and policy uncertainties.
Gold hit a new daily record of $4,242.12, supported by rate cut bets, a weaker dollar and trade tensions. In currency markets, India’s rupee posted its strongest rally since June after central bank intervention, lower oil prices and renewed foreign fund inflows.
