Asian and European markets made a mild recovery on Tuesday, recouping some of their recent losses as investors cautiously await Donald Trump‘s unveiling of sweeping tariffs. The US president’s “Liberation Day” announcement on Wednesday has sparked uncertainty, with trading floors bracing for impact.
Trump warned that he will impose levies on “all countries” for allegedly ripping off Americans. Although he promised to be “very kind” when unveiling the tariffs, the lack of detail has fueled uncertainty, hammering equities and stoking recession fears.
Tokyo’s Nikkei 225 edged up, along with Hong Kong’s Hang Seng Index and Shanghai’s Composite. London, Paris, and Frankfurt also rose at the open. However, the rebound was fragile, and gold hit another record high of $3,149.00 as investors sought safe-haven assets.
Jose Torres, a senior economist at Interactive Brokers, noted that some investors expect a “snap-back rally in risk assets” after Trump’s tariff plans announcement. However, others worry that the economy cannot handle the stress test posed by the tariffs.
Michael Wan at MUFG warned that markets are underpricing the magnitude of the tariffs, which could lead to a significant structural change in the global order.
The tariffs are expected to have a significant impact on global trade, with many countries likely to retaliate against the US. The European Union, China, and Japan are among the countries that have already announced plans to impose counter-tariffs on US goods.
Investor sentiment remains cautious, with many investors seeking safe-haven assets such as gold and bonds. The VIX “fear index” has risen for a fourth successive day, indicating increased market volatility.
Key Figures
– Tokyo – Nikkei 225: Flat at 35,624.48 (close)
– Hong Kong – Hang Seng Index: Up 0.6 percent at 23,266.32
– Shanghai – Composite: Up 0.4 percent at 3,348.44 (close)
– London – FTSE 100: Up 0.9 percent at 8,661.53
– New York – Dow: Up 1.0 percent at 42,001.76 (close)
The stock market recovery on Tuesday was a welcome respite for investors, but the uncertainty surrounding Trump’s tariff plans continues to weigh on market sentiment. As the global trade landscape continues to evolve, investors will be closely watching the developments and adjusting their strategies accordingly.