By: Swarnalata
Published on: May 12, 2025
Deep Dive: FTSE 100 and Global Markets Surge on US-China Tariff Deal
Market Movements
FTSE 100 (^FTSE): Up 0.4% by Monday afternoon, driven by optimism over a US-China trade deal. Mining stocks led gains, with Antofagasta (ANTO.L) and Glencore (GLEN.L) rising over 7%.
European Indices:
DAX (^GDAXI): +0.4%.
CAC 40 (^FCHI): +1.2%.
STOXX 600 (^STXE): +0.8%.
US Futures:
S&P 500 (ES=F): +3.1%.
Dow (YM=F): +2.4%.
Nasdaq (NQ=F): +4%.
Key Driver: US-China Trade Deal
Details: A 90-day tariff pause was agreed upon, reducing import duties by over 115 percentage points to 10% on both sides, as announced by US Treasury Secretary Scott Bessent.
Impact: The deal alleviates uncertainty that has weighed on global markets, boosting investor confidence and driving sharp gains in equities, particularly in trade-sensitive sectors like mining.
Why It Matters
The temporary truce in the US-China trade war, which had disrupted supply chains and rattled markets, provides businesses with short-term relief. The significant tariff reduction fosters optimism for global trade and economic stability, reflected in the broad-based rally across major indices.
Broader Context
Recent Trends: Uncertainty over high tariffs has suppressed investor sentiment for months, contributing to volatility in global markets.
Sector Focus: Mining stocks, sensitive to global trade dynamics, outperformed due to expectations of improved demand from China, a key commodity consumer.
Global Implications: The deal could pave the way for further negotiations, though its temporary nature means markets remain vigilant for longer-term resolutions.
Comments
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