Stocks and Dollar Edge Higher as Trump Softens Tariff Stance

Singapore: Asian markets rallied on Friday, heading for their second consecutive week of gains, while the U.S. dollar also looked set to mark its first weekly advance in over a month. Investors responded positively to signs of a potential shift in the U.S. administration’s stance on China tariffs.

The easing rhetoric from President Donald Trump, despite no formal confirmation of negotiations, has contributed to renewed market confidence. The S&P 500 gained 2% overnight, while S&P 500 futures rose an additional 0.5% in early Friday trading. Alphabet’s strong earnings report, in which it beat profit expectations and reaffirmed its AI investment strategy, further fueled the tech-led rally, sending its shares up nearly 5% in after-hours trading.

Currencies and Commodities

The U.S. dollar, which had been under pressure amid volatile tariff policy swings, steadied in Friday’s Asia session, hovering around $1.1350 per euro and 143 yen. The U.S. Dollar Index climbed 0.4% for the week, marking its first gain in weeks.

ING currency strategist Francesco Pesole noted that investor sentiment seemed to be improving. "There is probably a feeling from market participants that they have regained some 'control' on the U.S. government and can somehow force a more friendly stance on key topics," he said.

Gold prices held firm at $3,349 per ounce. Analysts at Philip Securities in Singapore highlighted the Gold/S&P 500 ratio had reached its highest level since the pandemic-induced market downturn of 2020, signaling lingering investor caution.

Asian Markets

In Japan, the Nikkei 225 rebounded 1.4%, recovering all losses since Trump’s April 2 tariff announcement. The market was buoyed by tech stocks, particularly Nidec, which soared 11% after forecasting record annual profit. Nissan shares rose 2%, reflecting optimism despite a projected record net loss.

Hong Kong’s Hang Seng Index rose 0.9%, while mainland China’s Shanghai Composite and CSI300 indices posted modest gains. Markets in Australia and New Zealand remained closed for a public holiday.

Global Trade Tensions Remain

Despite the market optimism, uncertainty looms. China has reiterated that no trade talks with the U.S. are currently underway and has warned other nations against making deals with Washington that compromise Beijing’s interests.

Jefferies' global head of equity strategy, Christopher Wood, remarked, "The equity rebound in the past two days is the direct result of Donald Trump's seeming U-turn on his stance on China tariffs, thereby confirming that the U.S. does not have the cards in this particular poker game."

Meanwhile, the U.S. Treasury market remains under pressure. Bond yields reflect cautious sentiment, with 10-year U.S. Treasury yields standing at 4.3168% on Friday, still elevated after the heavy selloff sparked by the initial tariff threats.

Corporate Outlooks Remain Cautious

Major U.S. firms such as Procter & Gamble, PepsiCo, Chipotle Mexican Grill, and American Airlines have all either reduced or withdrawn their forecasts due to ongoing consumer uncertainty. This adds a layer of concern to the otherwise buoyant markets.

Investors continue to keep a close watch on geopolitical developments and central bank signals as they assess whether the latest rebound has long-term sustainability amid a still fragile global trade landscape.