Nasdaq Surges 2.5% on Hopes of Trade Easing

The Nasdaq rose 2.5% Wednesday as Trump signalled a possible softening of tariffs on carmakers and a willingness to de-escalate trade tensions with China. Despite resilient corporate earnings, European markets face headwinds from falling business and consumer sentiment, with Germany’s Ifo index expected to confirm a decline. Asian shares slipped, though Japan’s Nikkei gained over 1% on tariff relief for autos, and SK Hynix posted strong chip profits.

Equities

The FTSE 100 rose 0.9% on Wednesday, notching its eighth straight day of gains, supported by strong performances in the banking and mining sectors. Standard Chartered climbed 6.3%, HSBC added 5.2%, and Barclays was up 4.9%, pushing the UK banks index 5% higher. Industrial metal miners gained 4.5% as copper prices hit a near three-week high in London.

Croda International was the top performer on the FTSE 100, jumping 10.7% after reporting an 8% increase in first-quarter group sales. The chemicals index rose 5.25% in response. Babcock shares rose 5.4% after the engineering group said it expects operating profit for fiscal 2025 to rise 17%. On the downside, Reckitt dropped 5.7% after missing first-quarter like-for-like net sales expectations. On the FTSE 250, Hochschild Mining fell 9.5% after reporting lower-than-forecast production in the first quarter.

In the US, major indices moved higher, driven by renewed hopes of a trade truce with China and signals of Federal Reserve independence. The Nasdaq led gains, jumping 2.5%, while the S&P 500 rose 1.67% and the Dow added 1.07%. Tesla rose 5.3% despite a 71% fall in quarterly net profit, after CEO Elon Musk said he would reduce his involvement with the Trump administration to focus on his companies.

Boeing climbed 6.1% after reporting a smaller-than-expected quarterly loss, as aircraft production and deliveries improved. General Dynamics fell 3.3%, despite a 27% rise in quarterly profit, as its business jet orders declined. First-quarter results from S&P 500 companies have been broadly positive so far, with 75% of companies beating analyst expectations. Analysts now expect earnings growth of 8.4% for the period, up from 8.0% at the start of the month.

Financial markets found support from comments by Treasury Secretary Scott Bessent, who said tariffs between the US and China were not sustainable. Meanwhile, President Trump pulled back from threats to remove Federal Reserve Chair Jerome Powell, easing concerns over central bank independence that had previously unsettled investors. Tech and consumer discretionary sectors led gains, while energy and consumer staples underperformed.

Forex & Commodities

The US dollar rose sharply on Wednesday, gaining 1.27% against the yen to reach 143.44 and strengthening 1.32% against the Swiss franc to 0.8298. The euro slipped 0.86% to $1.132, retreating from its recent 3½-year high near $1.15. The dollar’s advance followed comments from US Treasury Secretary Scott Bessent, who said the current tariff levels between the US and China are unsustainable. While discussions are ongoing, the White House indicated it would not cut tariffs unilaterally.

Gold prices fell 3% on Wednesday to $3,281.60 an ounce, following optimism over trade talks between the US and China. However, the metal rebounded 1.1% on Thursday morning in Asia, supported by dip buying and investor positioning around continued geopolitical uncertainty. US gold futures also gained 1.1% to $3,330.20. Despite the pullback, gold remains close to record highs, having hit $3,500.05 earlier in the week. Other precious metals moved lower, with silver down 0.8% to $33.29 an ounce and platinum edging 0.1% lower to $972.26.

Oil prices fell nearly 2% on Wednesday as speculation grew that OPEC+ could accelerate supply increases. Brent crude closed at $66.12 a barrel, down $1.32, and US West Texas Intermediate settled at $62.27, down $1.40. However, both benchmarks recovered on Thursday morning, with Brent climbing 0.8% to $66.65 and WTI up 0.88% to $62.82. Kazakhstan added to pressure on the OPEC+ bloc by stating it would prioritise national production interests. Market participants are also monitoring US-Iran nuclear talks, which could impact sanctions and oil supply.

US March new home sales data beat expectations, offering a modest boost to bond markets. The yield on 10-year Treasuries fell slightly to 4.385%, while 30-year yields dropped five basis points to 4.83%.