Wall Street's recent winning streak hit a pause on Friday as investor optimism around global trade negotiations was shaken by US President Donald Trump's renewed push for long-term high tariffs.
Markets had been rallying for three straight days on hopes that the United States would finalise trade agreements with key global partners. However, Trump's latest comments, shared in an interview with TIME Magazine, dampened the mood. The president said he would consider it a “total victory” if the U.S. maintained tariffs as high as 50% on imports even a year from now.
Market analyst Fawad Razaqzada of City Index and FOREX.com called Trump’s stance “an aggressive reminder” of his firm protectionist agenda, even as talks with China have shown signs of progress. Razaqzada said the remarks likely triggered the slight dip in stocks.
While the U.S. has imposed 145% tariffs on most Chinese goods, it has temporarily paused tariffs on other trading partners as negotiations continue. European markets remained in positive territory despite concerns, and most Asian markets ended higher, bolstered by speculation that China might exempt some American goods from its retaliatory tariffs.
AJ Bell's investment director Russ Mould noted that even modest signs of a thaw in the U.S.-China trade war are welcomed by investors. Meanwhile, strong corporate earnings continued to buoy sentiment. Alphabet, Google’s parent company, beat earnings expectations, driven by growth in its cloud and AI businesses, with shares jumping about 3% at opening.
European bourses also posted gains. Paris and Frankfurt climbed in afternoon trading, brushing aside comments from France’s economy minister suggesting a U.S.-EU trade deal was still distant. In London, stocks inched up thanks to upbeat retail sales figures from the UK.
Asian markets had a mostly positive day.
Tokyo rose nearly 2% amid reports that a second round of U.S.-Japan trade talks is scheduled for May 1, seen as a key test case for broader tariff negotiations. South Korea’s Seoul exchange also saw a 1% boost following news that a trade “understanding” with the U.S. could be finalised within days.
Back in the U.S., investors are increasingly hopeful that the Federal Reserve may cut interest rates sooner than anticipated. Fed Governor Christopher Waller indicated he would support such a move if tariffs start to negatively impact employment.
On the currency front, the dollar strengthened against major counterparts. Meanwhile, oil prices dipped by nearly 1%, as markets speculated that OPEC and its allies might further increase production.