Donald Trump’s decision to extend a truce in the trade war with China for another 90 days triggered a stock market rally across the globe on Tuesday. The US president signed an executive order extending the deadline for higher tariffs on China until 10 November, avoiding a rates cliff edge. Beijing responded by suspending additional tariffs on US goods for the same period.
Markets in Japan and Australia hit record highs, with Tokyo’s Nikkei rising 2.5% to 42,867.69 points and the Australian ASX 200 closing up 0.41% at 8,880. The Reserve Bank of Australia’s rate cut to 3.6% also boosted sentiment. In China, the Shanghai composite rose 0.5%, while Hong Kong’s Hang Seng was flat.
European markets opened higher: the UK’s FTSE 100 closed up 0.2% and France’s Cac 40 rose 0.5%. US markets also gained, with the S&P 500 up 0.9% and the Nasdaq climbing 1.1%, both heading towards records, aided by better-than-expected inflation data.
Economists warned that Trump’s trade war could damage the global economy through higher costs and supply chain disruptions. However, Mark Haefele of UBS called the truce “an encouraging step” that could yield concessions on fentanyl, rare earths, tech exports, and Russian oil. Oil prices rose on hopes of de-escalation, with Brent crude up 0.4% to $66.90 a barrel.
