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FTSE 100 Rallies Amid Easing US-China Trade Tensions
The FTSE 100 experienced robust gains on Wednesday, mirroring the upward trajectory of global stocks fueled by hopes of a de-escalation in US-China trade disputes. Investors are closely watching market trends for the latest insights into global economic shifts and trading opportunities.
London’s premier index climbed 1.3 percent to 8,436.04 by 11 a.m., marking its eighth consecutive day of advances.
U.S. equities also regained favor after President Donald Trump appeared to dismiss the possibility of removing Federal Reserve Chairman Jerome Powell.
Concerns regarding the independence of the U.S. central bank had previously triggered a sell-off of U.S. assets, driving gold prices to new heights.
However, Trump’s subsequent retraction led to a roughly 5 percent decrease in gold prices, while the S&P 500, Nasdaq, and Dow Jones indices rose by approximately 2.5, 2.7, and 2.6 percent, respectively, on Tuesday.
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Specialty chemicals manufacturer Croda International spearheaded the FTSE 100’s performance on Wednesday, surging 10.5 percent. Banks and mining companies constituted the majority of the top performers.
Antofagasta rose by 6.8 percent, Anglo American by 6.7 percent, and Standard Chartered, with its focus on Asia, gained 5.9 percent.
Powell Receives Reprieve Amid Market Volatility
Trump’s Stance on Interest Rates
Trump clarified that he has no immediate plans to dismiss Jerome Powell, the Federal Reserve Chairman, despite repeated criticisms for what he perceives as insufficient interest rate cuts.
The U.S. President’s previous remarks on social media, labeling Powell a ‘major loser,’ had destabilized global markets. However, he later told reporters at the White House that he has ‘no intention’ of firing the Fed chair.
‘I would like to see him be a little more active in terms of his idea to lower interest rates,’ he added. ‘This is the perfect time to lower interest rates. If he doesn’t, is it the end? No, it’s not.’
Market sentiment also improved following U.S. Treasury Secretary Scott Bessent’s assessment that a protracted trade war with China is ‘unsustainable’.
Speaking at an investor conference hosted by JP Morgan, Bessent, a former hedge fund manager, predicted a ‘de-escalation’ in the trade tensions between the U.S. and China.
According to a transcript obtained by the Associated Press, Bessent told investors: ‘I do say China is going to be a slog in terms of the negotiations. Neither side thinks the status quo is sustainable.’
The S&P 500 responded favorably to these remarks, ending Tuesday with a 2.5 percent increase, while the Dow and Nasdaq each saw gains of approximately 2.7 percent.
Asian markets similarly benefited from Trump and Bessent’s comments, with the Hang Seng increasing by 2.4 percent, the Nikkei by 1.9 percent, and South Korea’s Kospi by 1.6 percent.
Market Performance Since “Liberation Day”
Analyst Observations on Market Behavior
Susannah Streeter, head of money and markets at Hargreaves Lansdown, noted: ‘Financial markets are adjusting to Trump’s modus operandi, which is to speak and act impulsively, and then retract some moves later.’
‘Just how much of the damage will linger remains to be seen, and markets are likely to stay volatile as trade negotiations play out.’
Spot gold prices experienced a significant drop, falling approximately 5 percent from their recent high of $3,500 per ounce on Tuesday to $3,334.83/oz.
Investors have recently sought refuge in gold amid the volatility spurred by Trump’s fluctuating tariff policies which have induced volatility in global markets.
The U.S. Government currently imposes a baseline tariff of 10 percent on all imported goods, a 25 percent tax on steel and aluminum products entering the U.S., and a substantial 145 percent tariff on certain Chinese goods.
Russ Mould, investment director at AJ Bell, stated that Trump and Bessent’s comments ‘have given markets a sense of optimism that recent chaos might have peaked and we’re heading towards calmer waters.’
‘It almost suggests that someone has taken Trump to one side and told him it’s time to be more responsible with his words and actions.’
Despite recent gains, stock markets remain below their levels from “Liberation Day” – April 2nd – when Trump initially announced his extensive tariff measures. According to data from AJ Bell:
- The S&P 500 is down 6.7 percent.
- The FTSE 100 is 1.8 percent lower.