Asian stock markets are on track to post a second consecutive week of gains, with the dollar heading for its first weekly rise in more than a month. Investors are focusing on signs that the U.S. and China may be ready to scale back their trade war, which has been a major concern for global markets. In the U.S., futures rose after Alphabet, the parent company of Google, reported better-than-expected profits and reaffirmed its commitment to AI investments. This led to a nearly 5% increase in Alphabet’s shares during after-hours trading, helping to lift other tech stocks as well. European and U.K. stock futures also saw gains, with the FTSE futures up by 0.2%.
On Wall Street, investors responded positively to mixed corporate earnings results, with the S&P 500 rising 2%. The U.S. dollar, which had been under pressure due to volatility from tariff announcements and reversals, found support and stabilized around $1.1330 per euro and 143.6 yen. Market analysts are optimistic, with Eli Lee, Chief Investment Strategist at Bank of Singapore, stating that the peak of threatened tariff hikes may be behind us. Both the U.S. and China have indicated that they are unlikely to raise tariffs beyond the current levels, easing some of the tension in the market.
In Hong Kong, the Hang Seng Index rose 1%, while the Shanghai Composite and CSI300 saw modest gains. Japan’s Nikkei gained 1.8% on Friday, recovering all its losses since U.S. tariffs were announced. The market appears to be regaining confidence, with investors speculating that they may have successfully influenced the U.S. government’s stance on trade issues. As the dollar strengthens, market participants are awaiting further confirmation that this positive momentum will continue.
Despite the positive signs, there are warnings that the market’s calm might not last. Companies like Procter & Gamble, PepsiCo, Chipotle, and American Airlines have all reduced or withdrawn their forecasts, citing increased uncertainty among consumers. Gold prices remained firm at $3,349 an ounce, with analysts pointing to the Gold/S&P 500 ratio as an indicator of investor pessimism. Meanwhile, the U.S. Treasury market showed signs of stabilization, with 10-year yields steady at 4.30%.
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