Global Stock Market Rebound

Concerns over tariffs from the Trump administration have escalated in recent months, pushing European equities to a 7% discount compared to their fair value estimates since the trade policy announcements. Despite these headwinds, Europe’s macroeconomic outlook has shown resilience, bolstered by Germany’s proposed €500 billion infrastructure initiative, which could stimulate broader regional growth in the coming quarters.

Asia-Pacific markets surged midweek, tracking Wall Street's overnight gains on optimism that tensions between the U.S. and China may cool. President Trump suggested that the final tariffs on Chinese goods "won’t be anywhere near as high as 145%"—though he clarified they won’t be eliminated entirely. He also stated he has no plans to remove Federal Reserve Chair Jerome Powell, easing market concerns about the Fed’s independence.

Hong Kong led the regional gains with the Hang Seng Index up 2.08% and the Hang Seng Tech Index jumping 2.75%. Mainland China’s CSI 300 rose 0.34%, while Japan’s Nikkei 225 climbed 1.82%, and the Topix gained 1.9%. South Korea’s Kospi advanced 1.55%, the Kosdaq rose 1.89%, and India’s Nifty 50 and BSE Sensex edged up 0.34% and 0.17%, respectively. Australia’s S&P/ASX 200 also closed 1.33% higher.

U.S. markets rebounded strongly on Tuesday after Trump's comments reassured investors. The Dow Jones surged 1,016.57 points (2.66%) to close at 39,186.98. The S&P 500 added 2.51% to reach 5,287.76, and the Nasdaq Composite rose 2.71% to 16,300.42.

Trump’s softened stance on Powell, after a series of critiques regarding interest rates, helped restore investor confidence. Stock futures also climbed in response: Dow futures rose over 400 points, S&P 500 futures increased by 1.45%, and Nasdaq 100 futures advanced by 1.69%.

Despite the market upswing, investor caution lingers due to the ongoing U.S.-China trade tensions. Treasury Secretary Scott Bessent signaled possible “de-escalation” during a private investor meeting, fueling some optimism. Yet, steep tariffs remain in place—145% from the U.S. and 125% in retaliation from China.

In this climate of uncertainty, many investors have turned to safe-haven assets. Gold futures, for example, have climbed more than 8% in April, recently hitting an all-time high of $3,509.90. “There’s a lot of idle capital parked in gold right now,” noted Jamie Cox of Harris Financial Group. “Eventually, that money will re-enter the broader markets—but for now, it’s playing it safe.”