Positive earnings reports from US and hints about future news on the trade front between the U.S. and China helped lift investor spirits, boosting market activity, as stocks rebounded from a loss in stock market activity in USA on Tuesday. Also, the US dollar trended stronger after being relatively soft in the stock market. Which leads to the inner workings of US-China trade — a source that stock market is all eyes on.
The right signal have rallied the stock market in US
US stocks surged back following a down day in the previous session. The Dow Jones Industrial Average gained 2.66%, ending the day at 39,186.98 points, which is a bullish sign for the stock market. Likewise, the S&P 500 index added 2.51%, at a level of 5,287.76 in the stock market. Nasdaq Composite 2.71% to 16,300.42The turbulence list also turbos in the stock market, the decent rally of Nasdaq Composite in seven, strong performances also, rejecting All shared this and 2.71%s also. This bullish point in the stock market was a sign of renewed investor positive sentiment that came from US economic data and trade outlook.
This upward trend was largely driven by a handful of large US stock market listed companies. U.S. technology companies face tighter regulations, China souring on patents amid trade tensions 3M Co (MMM.N) beat quarterly profit estimates on Tuesday, and its stock jumped 8.1%, but also exposed what the company said are possible future hurdles to its profitability thanks to trade tariffs now in effect in the United States and other countries. 2 Tech US stock giant Apple also gained 3.4% of the value of its stock. After hours on the stock market, shares of electric vehicle maker Tesla briefly rose after the company reported total gross margin for the first quarter would be higher than analyst expectations, but revenue numbers missed expectations. In addition, Coinbase Global, one of the well-known ducks on the crypto market, gained in its shares have risen 8.6% following the Bitcoin price moving up, which also made a +4.61% to $91,360.62. Sentiment of overall stock market in US which is dependent on US-China trade developments was much influenced by performance of these US companies.
Trickled out of the US — positive sentiment from the US stock market was felt around the globe The MSCI index tracking stock performance in 47 countries gained 1.56% to 795.36. The pan-European STOXX 600 index also ended higher, up 0.25%. This upward movement in international stock markets reflected an overall improvement in investor behavior and also had a lot to do with US economic activity and trade outlook, especially US-China trade. The world stock market in recent times mostly responds to news from the United States and China.
Dollar Strengthens in US As Trade Outlook Improves
The dollar index, which tracks the value of the US dollar against a basket of six other major global currencies, looked to recover some of the losses from last week, rising 0.6% to 98.937. The US dollar strength came after slipping to 97.923 in the previous session, the weakest since March 2022. Meanwhile, the yen weakened, with the dollar rising 0.42% to 141.470, after the greenback briefly dipped below the psychologically important 140-yen mark for the first time since mid-September 2024. This recovery in the value of the US Dollar came around the same time that there were renewed hopes of some thawing between US/China attitudes that impact the stock market and currency values. As people can see the US currency performance is always connected with the US economic prospects and US trade policy toward China.
Expectations for US and China Trade Tension Relief
US Treasury Secretary Scott Bessent sparked a mood of optimism in the market. However, in a private meeting, Mr. Bessent expressed his view that de-escalation of the current trade tensions between the US and China were a near certainty. He called the high levels of trade tariffs the US and China have imposed as “sustainably high” at this time. He added a little more ‘hope’ into the stock market by saying negotiations between the US and China hadn’t technically started and were expected to take a long time. Investors had been growing worried about the potential negative effects of the ongoing trade conflicts between the US and China on the direction of the global economy and the stock market. The stock market takes any sign of a possible easing of these trade tensions favorably. Investors remain sensitive to US-China trade headlines, closely tracking how US-China trade policies relate to stock market performance.
IMF Updates Growth Projections with Gloomy Threat of Trade and US
Even after all the stock market reacted positively for the day to the news, an International Monetary Fund (IMF) report was issued, which cut growth forecasts for the US, China and most other countries. However, IMF pinpointed relatively high US trade tariffs against China and other partners as the main reason of factored down expectations. IMF: US trade tariffs at 100-year high. 6 The IMF has slashed its global–economic–growth outlook for 2025 to 2.8%, down from forecast of 3.3% in January. Downward revisions to the growth forecast for the US economy in 2025 (1.8% vs 2.7%) and China (4.0% vs 4.6%). These updated projections highlight the downside risks to global activity that continue to stem from the US and China being at loggerheads over trade, which can affect the stock market, too. This trade partnership is a key component of those international economic forecasts and stock market support.
Worries About Fed Independence and US Economy
The investors also kept a track of public comments by US President Donald Trump, where he reiterated his views on Powell. Better most recently, President Trump floated the possibility of Mr. Powell being dismissed from his position, if asked to, which might lead to questions of independence of the central bank and could also exacerbate fears related to the fragility of the US economy. The stock market tends to respond to signs of independence contentment. Nonetheless, the monetary policy independence of the Federal Reserve is still regarded as a key requirement of positive economic results in the US, as Vice President Neel Kashkari of the Minneapolis Fed has publicly testified. The relationship between US economic policy, Federal Reserve, and stock market is all-time hot topics, so is US-China trade relations with stock market.
Oil prices rise due to sanctions, stock market recovery in US
Gains of more than $1 per barrel for crude oil prices. The rise was explained by the imposition of fresh US sanctions on Iran and the overall revival of the stock market. Brent crude finished at $67.44 a barrel, up 1.8%, and the US West Texas Intermediate crude May contract, which expired on Tuesday, settled at $64.32, up 2%. The more actively traded June contract for WTI added 2%, to $63.47. While the broader equity market does at times move commodity prices (oil included) and geopolitical events that include the US may impact energy markets the lack of a definitive correlation between the two subsector is not wholly unexpected. Commodity markets can also be indirectly impacted by the trade policies of the US and China.
Gold Retreats from All-Time High as the Stock Market Excels in US
Spot gold retreated after climbing as high as $3,500.05 per ounce, an unprecedented peak, to end at $3,425.91 per ounce. This drop occurred as the USD continued to strengthen, with a generally stronger risk appetite that people have seen in stocks. Being a safe-haven asset, gold price may have an inverse correlation with the stock market performance and, in general, the strength of the US dollar. Positive or negative stock market sentiment (sometimes driven by US economic data or US-China trade news) can have a similar effect on the demand for safe-haven assets such as gold.
Other Key Insights
Market analysts say that, although the overall trajectory in the stock market may remain mildly bearish, the past few days of strength imply that investors are on the hunt for value and able to isolate areas of under copy in select sectors. The persistent dichotomy of soft economic data becoming weaker and hard economic data turning out more robust remains a major factor for stock market participants. US-China trade relations are an important factor driving the future of the stock market, and the changes in the situation are likely to remain prominent. U.S. trade policy and its effect on corporate profits and more broadly on economic activity, two basic determinants of stock market performance, and bad-news buyback. The stock market response to US-China trade news Shows how intertwined the global economy is with the financial markets. Whether or not the stock market can maintain its current trend will depend a lot of the trade talks between the US and China through tomorrow. Trade between the US and China is another key focus for the stock market.
