Global markets opened cautiously on Wednesday as mounting concern over U.S. trade policies and economic weakness put pressure on equities, commodities, and investor sentiment.
Oil prices dipped further and U.S. stock futures turned lower, despite some initial optimism over President Donald Trump’s partial easing of auto tariffs and ongoing trade talks with key partners.
Stocks and Oil Show Signs of Strain
Asian markets remained mixed. The MSCI Asia-Pacific index outside Japan gained just 0.1%, while Japan’s Nikkei rose 0.15%. Nasdaq and S&P 500 futures slipped by 0.6% and 0.4% respectively.
On the commodities front, Brent crude fell to $64.07 per barrel, extending Tuesday’s 2.4% loss. U.S. crude dropped to $60.21, following a 2.6% fall.
Gold prices remained steady at $3,316.11 per ounce, reflecting investor caution amid economic uncertainty.
Trade War Fallout Spreads to Corporate Sector
Trump’s recent tariff actions continue to send shockwaves through major U.S. companies:
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UPS announced plans to cut 20,000 jobs to reduce costs.
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General Motors scrapped its 2025 guidance and delayed its investor call, citing uncertainty.
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Several firms have pulled or slashed outlooks due to the lack of clarity on trade policies.
“We are seeing companies hesitate to sign long-term contracts or make plans — that’s a very slippery slope,” said Fabiana Fedeli, Chief Investment Officer at M&G.
U.S. Economy: Warning Signs Multiply
Economic indicators released Tuesday showed a widening U.S. trade deficit in March and consumer confidence hitting a five-year low in April — raising fears of a significant slowdown.
“We raise the probability of a prolonged economic stagnation to 50%,” said David Kohl, Chief Economist at Julius Baer.
“This is driven by erratic and restrictive economic policies and arbitrary tariffs.”
Markets are now pricing in nearly 100 basis points of rate cuts from the Federal Reserve by December, up from 80 bps last week.
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The two-year Treasury yield fell to 3.64%, its lowest in three weeks.
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The 10-year yield dropped to 4.158%, also a multi-week low.
Global Data Adds to Concern
Outside the U.S., China’s manufacturing activity shrank in April, ending a two-month rebound and reinforcing calls for more stimulus. Societe Generale now forecasts China’s GDP growth at 4% in 2025–26, citing ongoing deflationary risks.
Meanwhile, the onshore yuan slightly weakened to 7.2736 per dollar, and Hong Kong’s Hang Seng Index slipped 0.08%.
In currency markets, the U.S. dollar steadied after recent declines. The euro held firm near a three-year high at $1.1383, while the yen traded at 142.29 per dollar. The Australian dollar gained on stronger-than-expected inflation data.
Conclusion
Despite signs of diplomatic movement on some tariffs, the overall global sentiment remains fragile, with investors increasingly bracing for an extended period of low growth, volatile markets, and reactive policymaking. The combination of geopolitical trade risks, corporate belt-tightening, and weakening consumer demand continues to dominate the economic landscape.
