Trump Hints at Lower Tariffs on China Within 2-3 Weeks
U.S. Treasury Secretary Says "There Is an Opportunity for a Big U.S.-China Deal"
U.S. Sends Repeated Signals for Dialogue to China... Hopes Rise for Easing Tariff Tensions
The three major indices on the New York Stock Exchange opened higher on April 24 (local time). Market anxiety eased as the United States sent a series of conciliatory messages to China, with which it is engaged in a tariff war. Technology stocks are showing strong gains across the board, and investors are looking for signs of progress in tariff negotiations.
As of 10:43 a.m. on the New York Stock Exchange, the Dow Jones Industrial Average, which is centered on blue-chip stocks, was up 272.49 points (0.69%) from the previous trading day, standing at 39,879.06. The S&P 500 Index, focused on large-cap stocks, rose 68.67 points (1.28%) to 5,444.53, while the Nasdaq Index, centered on technology stocks, jumped 292.81 points (1.75%) to 17,000.86.
By sector, technology stocks are on the rise. Nvidia is up 2.27%. Microsoft (MS) is showing a gain of 2.33%, while Alphabet, Google's parent company, and Tesla are up 1.33% and 1.83%, respectively. Meta, Facebook's parent company, is up 1.65%.
The United States has repeatedly expressed its willingness to engage in dialogue with China, calming concerns over trade tensions between the two countries. President Donald Trump stated the previous day, "We will decide on the tariff rate on China within the next two to three weeks." Just one day after hinting at a possible reduction in tariffs on China, he set a specific timeline for the potential cut. When asked if negotiations with China were ongoing, he replied, "Yes," and added, "We are negotiating every day." In this regard, the Wall Street Journal (WSJ) reported that the Trump administration is considering lowering the additional tariffs imposed on China during his second term from the current 145% (20% fentanyl tariff + 125% reciprocal tariff) to between 50% and 65%, a reduction of more than half.
Scott Besant, the U.S. Treasury Secretary in charge of tariff negotiations, also mentioned easing U.S.-China tensions for the second consecutive day. Speaking at an Institute of International Finance (IIF) discussion in Washington, D.C. the previous day, he said, "There is an opportunity for a big deal between the U.S. and China," and added, "If they (China) want (trade) rebalancing, let's do it together." He particularly noted, "The current tariff levels are not sustainable for either side, and it would not be surprising if both sides reduce tariffs in a reciprocal manner," effectively proposing a simultaneous tariff reduction with China.
As President Trump has repeatedly backed down in the U.S.-China tariff war, which had escalated into a game of chicken, financial market instability has temporarily subsided. The shift in the U.S. tariff policy on China from a hardline stance to a more conciliatory approach has also raised hopes that the long-stalled U.S.-China trade negotiations could make progress. However, China refuted President Trump's claim that negotiations between the two countries are taking place daily, calling it "groundless." He Yadong, spokesperson for China's Ministry of Commerce, stated, "There are no trade negotiations underway with the United States," and added, "The United States must remove all unilateral tariffs imposed on China."
Gaurav Malik, Chief Investment Officer (CIO) at Palace Capital Advisors, commented, "It is encouraging that the government has taken a more dovish stance on tariffs, but the market's ultimate goal is tariff elimination or a substantial trade agreement, so stock prices may remain range-bound for the time being." He added, "It could take several months for the correction to end, and considering the pace of the decline, the market is still in a correction phase."
Employment indicators were in line with expectations. According to the U.S. Department of Labor, in the week of April 13-19, the number of new jobless claims was 222,000, an increase of 6,000 from the revised figure for the previous week, matching market expectations. The number of continuing jobless claims, which counts those claiming unemployment benefits for at least two consecutive weeks, stood at 1,841,000 for the week of April 6-12, below both the previous week's revised figure (1,878,000) and experts' expectations (1,880,000).
U.S. Treasury yields are on the decline. The yield on the 10-year U.S. Treasury, the global benchmark for bond yields, fell 7 basis points (1bp = 0.01 percentage points) from the previous trading day to 4.31%. The yield on the 2-year U.S. Treasury, which is sensitive to monetary policy, dropped 5 basis points from the previous day to 3.80%.
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