After three days of the global market turbulence not observed in the early days of the Covid-19 pandemic, stocks rebuilt a measure of calm on Tuesday despite the Little Letup in the scalable commercial tensions caused by President Trump’s invoices.
Before markets in China open, the government launched a series of measures to stabilize stocks. In turn, shares in Hong Kong, the day after 13.2 %sinking, and in mainland China rose about 1.5 %.
Stocks in Japan won 6 %, restoring part of the previous days. The rise to the emotion was followed by comments on Monday by Finance Minister Scott Bessent, who said he would soon be launching discussions with the Japanese government on invoices.
The Stoxx Europe 600 won about 1 % in the first transactions, with almost every major market in the green area. Pan-European Benchmark remains about 15 % lower than its climax in early March.
Stéphane Boujnah, Euronext’s chief executive, who manages a lot of stock markets across Europe, said in an interview on French radio that the disorder caused by invoices had made US markets “unrecognizable” to investors.
Markets around the world were not put into operation last week by Mr Trump’s announcement on broad new invoices – a 10 % basic tax on US imports, as well as significantly higher rates in dozens of other countries. Countries have responded to their own invoices on US goods or threats of retaliation. China responded strongly on Friday, matching a new 34 % invoice with one of its own in many US imports.
In the United States on Monday, the S&P 500 decreased by 0.2 % after the noisy negotiation that at one point pulled the reference point on the Bear market, or a fall of 20 % or more than its recent high. The S&P contracts, which indicate the way markets could run when they re -open for Wednesday negotiation in New York, were 1.5 % higher.
Wall Street executives and analysts are increasingly growing that the escalation of commercial tensions could cause constant damage to the world economy.
“The faster this issue is resolved, the better because some of the negative effects are cumulative over time and it would be difficult to reverses,” writes Jamie Dimon, chief executive of JPMorgan Chase, in his annual letter to shareholders on Monday. Some bank economists already predict that the economy will enter a recession later this year.
Concerns of economic growth are reflected in other markets, mainly in the price of oil, which continued to slip on Tuesday. Brent Sable, the international benchmark, is negotiating about $ 64 a barrel. It was over $ 80 the barrel three months ago.
The 10.5 % drop on the S&P 500 on Thursday and Friday was the worst two -day reduction in the index since the start of the Crown Pandemic in 2020.
With the new higher interest rate invoices in force on Wednesday, Mr Trump remained relentless in his commercial stance. On Monday, she issued a new ultimatum in China to cancel her invoices in the United States or face additional invoices of 50 percent from Wednesday.
But China showed on Tuesday that it is not mixed.
Several government departments and government companies have pledged to “maintain the smooth operation of the capital market”. And the Laiki Bank of China, the country’s central bank, has pledged to support the central investment of Huijin, the arm of China’s dominant wealth fund, which stated that it is increasing the equity holdings.
In addition, dozens of companies, many of which belonged to the government, announced that they were buying some of their shares, a move that usually lifts stock prices.
The moves from what is known as China’s “national team” were reminiscent of Beijing’s efforts during a 2015 market crisis.
At that time, the efforts of the Chinese government to promote shares came after its own steps to strengthen and then cool prices. This time, Beijing’s intervention seems to be hitting a strategy by the Chinese leader, Xi Jinping, to present his government as a steady calm pillar against the global economic turmoil released by Mr Trump’s invoices.
It remains to see how effective Beijing’s actions will be. The collapse in Chinese markets a decade ago was due to a sudden loss of confidence from investors, so stock support helped calm the nerves, said Zhiwu Chen, a professor of funding at Hong Kong University.
But Mr Trump’s invoices could cause damage to China’s economy. “This time, it is much deeper than market psychology,” Mr Chen said.
Christopher Batsley; Amy Chang Chien and Akira Davis River They contributed reports.
