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| China, U.S. |
Stocks soar, dollar rebounds, and gold slumps amid easing trade tensions between world’s top economies
Global financial markets surged on May 12 after the United States and China agreed to a 90-day suspension of punitive tariffs, calming fears of an escalating trade war that had rattled investors for months.
In Geneva over the weekend, negotiators struck a deal to slash U.S. tariffs on Chinese goods from 145% to 30%, while China cut its retaliatory duties from 125% to 10%. The temporary relief sparked broad-based rallies across equities and a sharp retreat from safe-haven assets.
Wall Street and Global Markets Surge
- S&P 500: +3.3%
- Nasdaq Composite: +4.4%
- STOXX 600 (Europe): +1.2%
- Hang Seng (Hong Kong): +2.9%
- MSCI Global Index: +2.0%
“This is a textbook recovery after the market’s waterfall declines,” said Gina Bolvin, president of Bolvin Wealth Management Group. “If it sticks, this is a big 'WIN' for Trump, for stocks, and for investors.”
Dollar Soars as Safe-Havens Retreat
- Dollar Index: +1.17%
- USD/JPY: 148.39 (+2.1%)
- Swiss Franc: -1.8%
- Euro: US$1.1090 (-1.4%)
- Spot Gold: US$3,234.80/oz (-2.7%)
Gold, which recently touched record highs of US$3,500/oz, pulled back sharply as risk appetite returned. The Swiss franc and Japanese yen, traditional safe-haven currencies, also weakened.
Commodities and Bonds React
- Brent Crude: US$65.10/barrel (+1.9%)
- 10-Year U.S. Treasury Yield: +10 bps
- German Bunds / UK Gilts: Similar yield increases
Oil traders repriced Brent crude upward as the tariff relief reduced recessionary risks. Meanwhile, bond yields rose on reduced demand for safe assets.
Uncertainty Lingers Despite Relief
While the tariff truce was welcomed as a “substantial relief” by Societe Generale’s Kit Juckes, market analysts warned the 90-day window does not resolve underlying trade tensions.
"Even if the U.S. keeps 30% tariffs, that’s still negative for growth,” said Sheldon MacDonald, CIO at Marlborough. Citi analysts noted that Trump’s support base might resist a compromise, referencing the failed 2018–2019 truce.
Until a final handshake deal between Trump and Chinese President Xi, investors may remain cautious, said John Praveen of Paleo Leon.
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