Global Markets Remained Hopeful on US-China Trade Talks

Global stock markets surged after President Donald Trump unveiled a trade deal framework with the UK, marking the first major agreement since the U.S. introduced sweeping tariffs in 2025. In this blog, we’ll know in detail what happened last week (May 5, 2025 to May 9, 2025) all across the globe.

US-UK Trade Deal

This deal spurred optimism, lifting indices globally, but focus swiftly turned to U.S.-China trade talks set for Saturday in Switzerland. These talks, the first since Trump’s January 2025 return, are pivotal as escalating tariffs- 145% on Chinese goods, countered by China’s 125% duties-have disrupted global trade, destabilized markets, and raised fears of widespread job losses.

The OECD cut its 2025 global GDP forecast to 3.1% from 3.2%, citing trade barriers and policy uncertainty, with G20 inflation expected at 3.8%. U.S. economic data bolstered market sentiment.

Initial unemployment claims dropped unexpectedly by 13,000 to 228,000 for the week ending May 3, beating Reuters’ 230,000 forecast, signaling labor market strength. However, global economic signals were mixed.

England Cuts Interest Rates

The Bank of England reduced interest rates by 0.25% to 4.25%, but a 5-4 vote split tempered expectations for further cuts, reflecting caution amid persistent inflation. In Japan, weaker-than-expected wage growth and slowing April exports heightened economic concerns, leading the Bank of Japan to maintain its 0.5% rate and delay inflation targets, though Governor Ueda left room for future hikes.

In another development, the People’s Bank of China cut its benchmark rate by 10bp and the reserve-requirement ratio by 50bp, while unveiling a series of additional measures to support the economy. The moves come ahead of China-US trade talks set to begin in Switzerland later this week.

Indian Market Faced Geopolitical Stress

Back at home, the Indian stock market experienced significant volatility this week, largely due to escalating geopolitical tensions between India and Pakistan. Reports of military actions and retaliatory strikes unsettled investor sentiment, triggering sharp market swings.

Future Outlook

Looking ahead, market turbulence is expected to persist as investors remain alert to further geopolitical developments and upcoming U.S. trade announcements.

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Reference:
SMC Global Securities’ Research Team

Author: All Content is verified by SMC Global Securities.