U.S. and Asian stock indices demonstrated strong growth following softened rhetoric on key issues concerning investors — the trade war with China and stability of Federal Reserve leadership.
“It won’t be that high,” Trump said. “It will come down substantially.”
Recovery After Decline
Earlier Tuesday, U.S. shares rebounded, with major indexes climbing 2.5% or more and big tech stocks regaining some ground lost a day earlier.
Traders were cheered by optimistic signals from the White House regarding tariff negotiations. According to people familiar with the matter, Treasury Secretary Scott Bessent expressed at an investor summit that he expects the trade war with China to de-escalate and believes a deal can be reached.
Negative Consequences of the Trade War
The market recovery is happening despite continuing reports of negative impacts from the tariff policies. Defense contractor RTX said it was bracing for an $850 million financial hit, while Huggies maker Kimberly-Clark cited a shifting “global geopolitical landscape” as partly to blame for a lower profit outlook.
The International Monetary Fund slashed its U.S. and global economic forecasts, warning that tariffs were ushering in a new era of slower growth.
Expert Assessments and Forecasts
Goldman Sachs Chief Executive David Solomon said uncertainty was “too high,” holding back corporate decision-making and keeping asset prices under pressure. And the IIF, a finance industry trade group, said the U.S. faced a likely recession later this year.
Commodity Market Dynamics
Gold retreated after surging early Tuesday to a new record high above $3,500 a troy ounce. The precious metal, coveted in times of uncertainty and stress, has cemented its status as the undisputed winner from this month’s tariff-fueled market turmoil.
Corporate News
After hours, Tesla reported quarterly results that missed earnings estimates but its shares were largely unchanged.
Investors’ concerns over the trade war and previous threats of firing the Fed chair had stirred up market volatility Monday, but the latest statements helped stabilize the situation.