Footsie fights back after days of turmoil on Trump tariff deal hope – but Wall St falls again in late trading chaos

FTSE 100 Recovers After Market Turmoil Amid Trade Deal Optimism

Following a period of intense selling, the FTSE 100 rebounded on Tuesday, mirroring gains in global stock markets. This recovery in the stock market is fueled by renewed hopes that President Donald Trump may consider tariff deals, easing fears of escalating trade tensions. Investors are closely watching developments relating to potential negotiations after recent market volatility.

Market Rebound and Trump’s Statements

The blue-chip index, along with other major global indices, experienced a partial recovery from substantial losses incurred in recent sessions. This upturn followed positive remarks from the US President regarding potential trade discussions.

President Trump indicated that discussions with Beijing are anticipated, despite his recent threats to significantly increase tariffs on Chinese goods, potentially exceeding 100 percent.

However, market optimism was tempered by subsequent confirmations from officials that the increased tariffs were still under consideration, leading to reversals of earlier gains on Wall Street during volatile trading.

Impact of Tariff Announcements on Global Markets

Global markets have faced significant instability since President Trump’s announcements of import levies on trading partners. These actions have intensified concerns about a potential worldwide economic downturn. Analysts have cautioned that continued fluctuations are likely as markets react to further announcements from the Trump administration regarding tariffs and trade policy.

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Despite the day’s gains, the FTSE 100 concluded trading up by 2.7 percent, partially offsetting the severe declines of 4.4 percent and 5 percent from the preceding days.

Investor Sentiment and Market Analysis

Despite the recovery, the index remains more than 8 percent lower compared to the previous week, which began with President Trump’s tariff announcements, dubbed ‘Liberation Day’ by him, targeting nations accused of unfair trade practices with the United States.

The market rebound also reflects some investors capitalizing on lower stock prices, anticipating future gains if the market continues to recover.

Susannah Streeter, a market analyst at Hargreaves Lansdown, commented that the indication of possible negotiations has brought relief, spurring the FTSE 100’s recovery from recent losses. She noted that investors are strategically purchasing undervalued stocks, anticipating longer-term market improvement.

Russ Mould, an investment director at AJ Bell, suggested that investor focus remains on tariff negotiations, hoping affected nations can secure agreements with the US administration to mitigate the full impact of the levies announced in the ‘Liberation Day’ speech.

President Trump reiterated the possibility of a favorable agreement with South Korea and affirmed that discussions with Beijing are expected to occur.

“China also wants to make a deal, badly, but they don’t know how to get it started. We are waiting for their call. It will happen,” he stated on his social media platform.

However, Beijing has already responded to US tariffs with retaliatory measures, imposing a 34 percent tariff on US imports and pledging to “fight to the end.” Many experts maintain a cautious outlook.

Anthony Willis, a senior economist at Columbia Threadneedle Investments, pointed out that the coming days will be crucial in determining the willingness of countries to negotiate with the US, which will indicate the potential extent of further economic repercussions.

Global Market Reactions

Overnight trading saw Asian stocks rally, with Hong Kong’s Hang Seng increasing by 1.5 percent and Japan’s Nikkei 225 soaring by 6 percent, reportedly fueled by expectations that Japan was prioritized for trade negotiations with the US. China’s Shanghai Composite also saw gains, rising by 1.6 percent.

European markets followed suit, with Germany’s DAX rising by 2.5 percent, pushing it into positive territory for the year, and France’s CAC 40 also increasing by 2.5 percent.

Wall Street initially opened with significant gains, with the S&P 500 climbing over 3 percent.

Yet, these gains diminished by market close, with the S&P 500 reversing by 1.6 percent, the Dow Jones Industrial Average decreasing by almost 1 percent, and the technology-heavy Nasdaq Composite declining by over 2 percent.

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