Global Stocks Rally as Signs of U.S.-China Trade Talks Lift Market Mood

SINGAPORE, May 2, 2025 — Global stock markets surged on Friday following tentative signs of renewed trade talks between the United States and China, offering a reprieve to investors rattled by disappointing tech earnings and growing concerns over the global economic outlook.

China’s commerce ministry said Friday that Washington had expressed willingness to resume negotiations on tariffs, and that Beijing remained open to talks. The comments offered a rare glimmer of optimism in markets battered by months of escalating trade friction.

The remarks spurred a swift turnaround in U.S. stock futures, which had been under pressure after Apple reduced its share buyback program and warned that tariffs could inflate costs by nearly $900 million this quarter. Futures for the S&P 500 rose 0.8%, while Nasdaq futures climbed 0.6%.

European markets were poised to open higher, with Eurostoxx 50 futures up 1.3%. In Asia, the MSCI’s broadest index of Asia-Pacific shares outside Japan rose to its highest since late March, recouping losses sustained since the trade conflict intensified in early April. Japan’s Nikkei gained over 1%, Taiwan's benchmark index jumped 2.4%, and Hong Kong’s Hang Seng advanced 1.6%. Mainland China markets remained closed for a holiday.

Matt Simpson, senior market analyst at City Index, noted that while the rhetoric from Beijing was restrained, it marked a shift. “They (China) have struck a cautious tone, demanding that the U.S. 'show sincerity' if they want trade talks,” he said.

Despite the rebound, markets remain jittery. President Donald Trump’s unpredictable tariff decisions have fueled fears of a broader economic downturn. Recent data showed the U.S. economy contracted for the first time in three years in the first quarter. In China, factory activity fell at the fastest rate in over a year.

“The main impact of the tariffs will be felt when price increases hit consumers,” said Joseph Capurso, head of international and sustainable economics at Commonwealth Bank of Australia. “A recession will become likely if spending declines and firms cut jobs and investment. While a recession is not our base case, it’s going to be a close call.”

The corporate earnings season has reflected the economic unease. While Microsoft and Meta Platforms posted encouraging results earlier in the week, the tone was dampened by weaker performances from Apple and Amazon. Many companies are withdrawing profit forecasts amid uncertainty around trade policy.

Currency markets echoed the volatility. The Japanese yen briefly fell to its lowest level since April 10 before recovering to 145.26 per dollar. The Bank of Japan left interest rates unchanged Thursday and cut its growth outlook, citing risks tied to U.S. tariffs. HSBC’s chief Asia economist Fred Neumann said the BOJ was proceeding cautiously. “The BOJ is keeping the door open for further rate hikes, but at this point the door is only slightly ajar,” he said.

The dollar index hovered at 100.02, slightly lower on the day but still on track for a 0.4% weekly gain, ahead of key U.S. nonfarm payrolls data due later Friday. Economists polled by Reuters expect 130,000 jobs to have been added in April, following a 228,000 rise in March.

In Tokyo, Finance Minister Katsunobu Kato said Japan’s holdings of over $1 trillion in U.S. Treasury securities could be a factor in ongoing trade negotiations. His comments came as Japan’s chief negotiator met with U.S. Treasury Secretary Scott Bessent in Washington for another round of bilateral talks.

In commodities, gold rose to $3,252.11 an ounce but was heading for its worst weekly showing since February’s end. Oil prices rose on renewed threats of U.S. sanctions against Iran and optimism that trade tensions might ease. Brent crude futures added 0.66%, while U.S. West Texas Intermediate rose 0.7%.

While an olive branch has been offered, you can hardly say China has ‘come crawling’ like Trump had hoped.