Global stocks reach record highs as Trump softens China stance

A week that began with significant risks for global markets is ending on a positive note, with stocks reaching record highs after US President Donald Trump appeared to ease his tough stance on tariffs against China.

The yen also strengthened following the Bank of Japan's decision to raise interest rates, News.Az reports, citing Bloomberg.

The president said in an interview with Fox News that he would rather not use tariffs against the world’s second-largest economy. He has also, so far, held back from imposing tariffs on Europe, though he warned of levies against Canada and Mexico. Trump’s comments in his first week in office suggest he plans to use trade measures as a negotiating tool, resulting in headline-driven market volatility, said Mohit Kumar, chief economist and strategist at Jefferies International Ltd.

“The treat of tariffs will be used to gain favorable terms for US businesses, but eventually tariffs will not be as bad a feared,” Kumar said. “We are still happy to keep a long position in US equities.”

Europe’s benchmark Stoxx 600 index climbed for an eighth day and is on track for a fifth weekly advance after closing at a record high on Thursday. US futures were steady after the S&P 500 scaled a fresh peak. The nine-day advancing streak by MSCI’s all-country share index would be the longest in more than a year.

The 10-year Treasury yield dipped and a gauge of the dollar fell to a one-month low. Chinese stocks jumped and the yuan extended gains, while a gauge of emerging-markets currencies is poised for its best week since July 2023.

Market attention Friday will be on PMIs for Europe and the US, while corporate earnings continue to trickle in. Ericsson AB shares plunged after the Swedish telecommunications equipment maker reported results that missed analysts’ estimates. Burberry Group Plc jumped after the maker of upmarket trench coats reported better-than-expected sales.

Meanwhile, shares in Banca Monte dei Paschi di Siena SpA slumped after the Italian lender launched a takeover bid for Mediobanca SpA, whose shares rose.

In Japan, the yen strengthened against the greenback, after the Bank of Japan raised interest rates for the first time since July. It briefly broke through the key 155 level versus the dollar during Governor Kazuo Ueda’s press conference before pulling back as traders parsed his comments.

The central bank signaled that it sees a faster pace of inflation in the coming years compared with its previous forecast. The BOJ also said if its outlook is realized, it will continue to raise the policy rate. The country’s two-year and five-year government bond yields rose to their highest levels since 2008. The Topix index of stocks fluctuated.

News.Az