Global Trade Concerns Weigh on Hang Seng Index and FTSE 100

Global stock markets experienced a downturn on Wednesday as optimism surrounding eased trade tensions faded. The Hang Seng Index was among those that closed lower, while oil prices surged following indications from Washington of potential new sanctions against Moscow related to the ongoing conflict in Ukraine. On Wall Street, all three major indexes ended the day in the red, despite a significant after-hours surge in Nvidia’s shares after the company reported strong quarterly earnings.

Market Reactions to Trade Tensions

The decline in global stock markets was influenced by a combination of factors, including the fading optimism over trade negotiations. The latest minutes from the Federal Reserve’s meeting revealed that U.S. companies expressed concerns that the costs associated with President Donald Trump’s tariffs would likely be passed on to consumers. This sentiment contributed to a cautious atmosphere among investors. European markets in London, Paris, and Frankfurt mirrored the downward trend observed in Asia, further indicating a widespread market reaction to the evolving trade landscape.

In the United States, the major indexes reflected this uncertainty, with the S&P 500, Dow Jones, and Nasdaq Composite all closing lower. The declines came ahead of Nvidia’s earnings report, which ultimately saw the company’s shares rise sharply in after-hours trading, buoyed by impressive financial results. Nvidia reported a profit of $18.8 billion on revenues of $44.1 billion, showcasing the company’s resilience despite tighter export controls.

Oil Prices Surge Amid Geopolitical Tensions

Crude oil prices saw a notable increase of over two percent before settling slightly lower ahead of an OPEC meeting focused on production levels. The surge in oil prices was driven by escalating tensions surrounding Russia and Iran, raising concerns about potential supply disruptions. President Trump’s direct criticism of Russian President Vladimir Putin, in light of intensified attacks in Ukraine, has heightened expectations for tougher U.S. sanctions targeting Russian energy and financial sectors.

Additionally, stalled negotiations regarding the U.S.-Iran nuclear deal have led to speculation about further sanctions, contributing to the volatility in oil markets. The U.S. dollar also strengthened against major currencies, although analysts cautioned that this might obscure underlying weaknesses in the dollar and the U.S. debt market. Stephen Innes from SPI Asset Management noted that the perception of U.S. assets as a safe haven is shifting, indicating a more complex market landscape.

Investors’ Perspectives on Tariff Announcements

Market sentiment shifted as investors began to look beyond recent tariff announcements. Earlier in the week, President Trump’s decision to pause a planned 50-percent tariff on the European Union had sparked a brief rally. However, the market’s reaction has since turned cautious, with analysts suggesting that investors are becoming skeptical of the administration’s tariff strategies. Kathleen Brooks, research director at XTB, remarked that the market no longer takes Trump’s tariff announcements at face value, indicating a growing wariness among investors.

David Morrison, a senior analyst at Trade Nation, echoed this sentiment, suggesting that investors are adopting an overly optimistic view, assuming that trade negotiations will ultimately yield positive outcomes. This perspective may soon be challenged, as the complexities of a potential U.S.-EU trade deal could prove more difficult than anticipated. In corporate news, Stellantis, the European auto group, announced the appointment of Antonio Filosa as its new CEO, following the dismissal of Carlos Tavares. Stellantis shares closed over two percent lower in Milan, reflecting the broader market trends.

Key Market Figures and Currency Updates

As of the latest trading session, key market figures indicated a downward trend across major indexes. The New York S&P 500 closed down 0.6% at 5,888.55, while the Dow Jones also fell by 0.6% to 42,098.70. The Nasdaq Composite decreased by 0.5%, ending at 19,100.94. European markets followed suit, with the London FTSE 100 down 0.6%, the Paris CAC 40 down 0.5%, and the Frankfurt DAX down 0.8%.

In currency markets, the euro dipped against the dollar, trading at $1.1291, while the pound also fell to $1.3468. The dollar strengthened against the yen, rising to 144.82 yen. Oil prices saw a slight increase, with Brent North Sea Crude up 1.3% at $64.90 per barrel and West Texas Intermediate up 1.6% at $61.84 per barrel. These figures reflect the ongoing volatility and uncertainty in both equity and commodity markets.

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