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Trade tensions fuel volatility - gold surges to record

Global equity markets diverged to start the week as shifting signals in the US-China trade dispute defined sentiment. US stocks advanced strongly on Monday, recouping prior losses as US President Donald Trump struck a more conciliatory tone, sparking a rally in technology shares and lifting major indices. European equities managed a modest recovery on Monday. In contrast, Asian markets dropped sharply on Tuesday as a cautious tone took back over, notably with Japan’s Nikkei 225 leading losses. Gold prices soared to a new all-time high as investors sought safe havens. Investors are focused on a full slate of corporate earnings on Tuesday as the third-quarter earnings season kicks off with major US banks.

  • Date
  • Auteur Shane Strowmatt, Senior Investment Writer
  • Temps de lecture 5 minutes

Volatility
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Major US stock indices closed higher on Monday as signs of reduced trade tensions between the United States and China supported market sentiment. The Dow Jones Industrial gained 1.3% to 46,067.58 points, the Nasdaq 100 rose by 2.2% to 24,750.25 points, and the S&P 500 advanced by 1.56% to 6654.72 points, recovering losses from Friday after Trump’s tariff threats. Broadcom shares jumped nearly 10%, driven by news of a multi-year partnership with OpenAI, while Tesla led gains among the largest US technology companies with a rise of 5.4%. Meanwhile, US Treasuries fell across the curve, with the 2-year below 3.5%, the 10-year at 4%, while the US Dollar Index slipped slightly.

Asian equities retreat on trade tensions

Asian stock markets declined sharply amid on Tuesday, with the Nikkei 225 sinking 2.4%. The sell-off followed last week’s threats by Trump to impose 100% tariffs on Chinese imports after Beijing’s moves to restrict exports of critical minerals, despite some optimism from expected talks between Trump and Chinese President Xi Jinping. Korea’s Kospi fell 0.5% after hitting a record high earlier in the session. Hong Kong’s Hang Seng Index dropped 0.8%, while mainland China’s CSI 300 was essentially flat. Australia’s S&P/ASX 200 bucked the trend, trading 0.2% higher. In individual stocks, shares of Chinese chipmaker WingTech tumbled 10% at the open on Tuesday after the Dutch government took control of its subsidiary Nexperia, aiming to protect domestic supply chains under the "Goods Availability Act". Nexperia, producing chips vital for automotive and consumer electronics sectors, is considered critical to Europe’s technology infrastructure.

Gold reaches new high as trade tensions escalate

Gold prices jumped to a fresh record around USD 4180 per ounce in Asian trading on Tuesday, before falling back to around USD 4130, as investors flocked to safe-haven assets. China’s commerce ministry confirmed ongoing trade talks with the US but vowed to maintain a firm stance against US measures, adding to market uncertainty. Silver also rose to a new peak above USD 53 per ounce, while platinum prices advanced, supported by a weaker US dollar.

European equities rebound after trade fears ease

European stock markets staged a mild recovery on Monday following a strong sell-off at the end of last week, buoyed by the positive momentum from Wall Street. The Euro Stoxx 50 rose 0.7% to 5,570.05 points, Germany’s DAX was up 0.6%, and France’s CAC 40 edged 0.2% higher. The Swiss Market Index finished almost flat. After last week’s slide triggered by US tariff threats, a less confrontational tone helped stabilise sentiment. Resource and technology shares led gains, with ASML up 3.7%, while ABB rose 0.7% on news of a partnership with Nvidia to develop artificial intelligence data centres.

Singapore leaves monetary policy unchanged

Singapore’s central bank maintained its monetary policy settings on Tuesday, with the Monetary Authority of Singapore choosing to keep the prevailing rate of appreciation for its exchange rate policy band unchanged. Preliminary data released showed the economy grew by 2.9% year-on-year in the third quarter, outperforming market expectations of 1.9%, as resilience was sustained despite headwinds from US tariffs. The government upgraded its GDP growth outlook for 2025 in August following stronger first-half performance.

All surviving Israeli hostages in Gaza released

Israel confirmed on Monday that all 20 remaining living hostages held by Hamas in the Gaza Strip were freed, marking the end of a 738-day ordeal. Meanwhile, Hamas has so far handed over the remains of only four out of up to 28 deceased hostages, prompting calls for compliance with the agreement. Israel began releasing hundreds of Palestinian captives in exchange as part of a peace plan brokered largely by the United States. The event sparked large celebrations in Israel and was seen by experts as closing a chapter on a prolonged national trauma but is likely to have limited impact on financial markets.

Corporate and economic calendar

Corporate news in focus: Quarterly figures from Citigroup, Goldman Sachs, Johnson & Johnson, JPMorgan Chase, and Wells Fargo. Annual general meeting at Procter & Gamble.

Economic data in focus: UK unemployment rate (08:00), German Consumer Price Index (08:00), Swiss Producer and Import Price Index (08:30), Germany’s ZEW Indicator of Economic Sentiment (11:00), Chinese money supply (11:00), Canadian building permits (14:30), Federal Reserve Chair Jerome Powell speaks (18:20) and Bank of England Governor Andrew Bailey speaks (19:00).

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Editor: Alessandro Fezzi
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