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Global stock markets and U.S. futures experienced an upturn on Tuesday, primarily driven by a significant rebound in Tokyo’s financial sector, where the Nikkei 225 surged over 6%. This shift comes in the wake of market volatility spurred by President Trump’s announcement of increased tariffs.
On Wall Street, stocks previously fluctuated dramatically as investors reacted to Trump’s threats to raise tariffs, with some climbing dangerously high into double-digit territory. This turbulent backdrop set the stage for a cautious recovery in many markets.
Early on Tuesday, the Chinese Commerce Ministry declared its intention to “fight to the end” against U.S. trade actions, pledging to implement undisclosed countermeasures in response to Trump’s new tariff proposals, including a staggering 50% increase on imports from China.
In Europe, indices showed promising results, with Germany’s DAX rising by 0.9% to reach 19,975.81. The CAC 40 in Paris followed suit, climbing 1.3% to 7,018.79, while the FTSE 100 in London recorded similar gains, also increasing by 1.3% to 7,804.73.
U.S. futures indicated a positive trend as well, with the S&P 500 up by 1.61%, Dow Jones Industrial Average futures increasing by 2.08%, and Nasdaq Composite futures rising by 1.33%, according to data from Yahoo Finance.
Specifically in Tokyo, the Nikkei 225 ultimately closed at 33,012.58, reflecting a robust increase of just over 6%. Meanwhile, Hong Kong’s market staged a recovery, though it was still reeling from a staggering drop of 13.2% the previous day, resulting in its worst performance since the Asian financial crisis of 1997. The Hang Seng index managed to improve by 1% to 20,036.03, while the Shanghai Composite index gained 1.4%, closing at 3,140.15, bolstered by directives from the Central Huijin investment fund encouraging state-owned enterprises to engage in share buybacks.
In South Korea, the Kospi index saw a modest rise, advancing 0.3% to 2,334.23, and Australia’s S&P/ASX 200 notched up an impressive 2.3% increase, ending at 7,510.00.
However, the situation was less favorable elsewhere, particularly in Thailand and Indonesia, where markets faltered as they reopened following holiday breaks. Trading in Jakarta faced interruptions as the JSX index plummeted more than 9%, ultimately settling down by 7.6% during the day. Thailand’s SET index similarly fell by 4.2%. Additionally, the Taiwanese market experienced declines, with the Taiex dropping 4%, largely impacted by a near 3.8% reduction in shares of Taiwan Semiconductor Manufacturing Corp. (TSMC), the leading manufacturer of computer chips.
The previous day saw the S&P 500 slip by 0.2%, the Dow drop by 0.9%, while the Nasdaq managed a slight gain of 0.1%. As investors are left to navigate the uncertain waters of Trump’s trade strategy, analysts suggest that a shift toward favorable trade agreements with other nations could enable a reduction in tariffs and potentially stave off a recession. Conversely, a persistent reliance on tariffs could lead to further declines in stock prices.
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