[New York Stocks] Rise for Third Day on Tariff Negotiation Progress, Rate Cut Hopes...Tech Stocks Lead

Trump: "Another Meeting with China Today... Tariff Decision Within 2-3 Weeks"
Expectations Rise for Easing of US-China Tariff Dispute
US Treasury: "Successful Tariff Talks with Korea"
Waller, Fed Governor: "Will Support Rate Cut if Employment Weakens"

The three major indices of the New York Stock Exchange closed higher for the third consecutive day on April 24 (local time). Market anxiety eased as the Donald Trump administration continued to send conciliatory messages to China, with which it is engaged in a tariff war. Expectations that the Federal Reserve (Fed) might move up the timing of an interest rate cut due to concerns about a tariff-induced economic slowdown also helped boost stock prices.

Reuters Yonhap News

On this day, the Dow Jones Industrial Average, which focuses on blue-chip stocks, closed at 40,093.4, up 486.83 points (1.23%) from the previous trading day. The S&P 500 index, which tracks large-cap stocks, rose by 108.91 points (2.03%) to close at 5,484.77, while the tech-heavy Nasdaq index jumped 457.99 points (2.74%) to finish at 17,166.04.

By sector, technology stocks rose across the board. Nvidia climbed 3.62%. Microsoft (MS) gained 3.45%, and Apple advanced 1.84%. Tesla jumped 3.5%, while Meta, the parent company of Facebook, rose 2.48%. Alphabet, the parent company of Google, gained 2.38% ahead of its earnings announcement after the market closed.

As the United States repeatedly expressed its willingness to engage in dialogue with China, concerns over the trade war between the two countries subsided, driving investor sentiment. President Trump stated the previous day that he would 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 specified a concrete timeline for such a move. When asked whether negotiations with China were ongoing, he answered, "Yes," and added, "We are negotiating every day." On this day, he again confirmed ongoing talks by telling reporters at the White House that "they (U.S. and Chinese officials) had a meeting this morning" when asked about negotiations with China. Although the Chinese Ministry of Commerce refuted President Trump's remarks from the previous day that the two sides were negotiating daily as "not true," President Trump reiterated that negotiations between the two countries are indeed taking place.

The Wall Street Journal (WSJ) reported the previous day that President Trump is considering lowering the additional tariffs imposed on China during his second term from the current 145% (20% fentanyl tariff + 125% reciprocal tariff) to a range of 50% to 65%.

In this context, Scott Besant, U.S. Treasury Secretary and the chief negotiator for the tariff talks, effectively proposed a simultaneous reduction of tariffs by both the U.S. and China. Speaking at an Institute of International Finance (IIF) forum held in Washington, D.C. the previous day, Secretary Besant said, "There is an opportunity for a big deal between the U.S. and China," adding, "The current tariff levels are not sustainable for either side, and it would not be surprising if both sides reduced tariffs in a reciprocal manner."

With President Trump repeatedly stepping back in the U.S.-China tariff war, which had escalated into a game of chicken, some of the anxiety in the financial markets has been alleviated. There is also renewed hope that the long-stalled trade negotiations between the U.S. and China may make progress.

The market is also looking for signs of progress in tariff negotiations between the United States and other countries. Secretary Besant evaluated the U.S.-Korea 2+2 trade talks held on this day as "successful." He said the negotiations "could progress faster than expected," adding, "We may reach an understanding as early as next week, and could discuss technical issues as early as next week."

Comments from central bank officials suggesting that the Fed may accelerate the timing of an interest rate cut also stimulated investor sentiment.

Christopher Waller, a member of the Fed's Board of Governors, said in an interview with Bloomberg TV that he would support an interest rate cut if tariffs deliver a shock to the labor market. Beth Hammack, President of the Federal Reserve Bank of Cleveland, said that if clear evidence on the direction of the economy emerges, the Fed could lower rates as early as June.

However, Wall Street remains unable to shake off concerns about a bear market due to continued tariff uncertainty.

Ross Mayfield, investment strategist at Baird, commented on the day's rally, saying, "I don't trust this (upward) move," and added, "China made it clear overnight that negotiations are not taking place."

Gaurav Malik, Chief Investment Officer (CIO) at Palace Capital Advisors, said, "It is encouraging that the government is taking a more dovish stance on tariffs, but the market's ultimate goal is tariff elimination or a significant trade agreement, so stock prices may remain in a range for the time being." He added, "It could take several months for the adjustment to end, and given the pace of the decline, the market is still in a correction phase."

Employment data met expectations. According to the U.S. Department of Labor, the number of new unemployment claims filed in the week of April 13-19 was 222,000, an increase of 6,000 from the previous week's revised figure, matching market expectations. The number of continuing unemployment claims, which counts those receiving benefits for at least two consecutive weeks, was 1,841,000 for the week of April 6-12, lower than both the previous week's revised figure of 1,878,000 and the expert forecast of 1,880,000.

U.S. Treasury yields are on a downward trend. The yield on the 10-year U.S. Treasury, the global benchmark for bond yields, fell by 8 basis points (1bp = 0.01 percentage point) from the previous trading day to 4.3%. The yield on the 2-year U.S. Treasury, which is sensitive to monetary policy, dropped by 7 basis points to 3.79% compared to the previous day.