(Bloomberg) — Global stocks rebounded and some early signs of calm returned to Wall Street following the biggest three-day plunge since 2020, with investors focusing on the possibility of US trade negotiations.
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US equity futures gained more than 1%, with Nvidia Corp. leading the Magnificent Seven tech megacaps higher in premarket trading. Apple Inc. climbed about 1% after the iPhone maker’s shares had plunged 19% over the past three trading days, its biggest three-day collapse since July 2001. Treasuries and the dollar were steady.
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Traders are dipping back into risk assets after one of the most brutal selloffs in years, with some taking hints that President Donald Trump might be willing to ease his position on trade terms after Japan pushed ahead with talks. That sent the Nikkei 225 index to a 6% surge.
Still, warnings are piling up on the bleak outlook for stocks. BlackRock Inc. strategists downgraded US equities on Monday to neutral from overweight, while a team at Goldman Sachs Group Inc. said the equity selloff could well turn into a longer-lasting cyclical bear market as recession risks mount.
“The Trump administration is signaling his openness to trade deals,” said Elias Haddad, a strategist at Brown Brothers Harriman. “Regardless, the pervasive uncertainty created by continuously changing US tariff threats and the scope of potential retaliatory measures remain a major blow to the global economy. Bottom line: relief rallies in risk assets will likely be short-lived.”
Trump made a string of comments Monday about his planned duties, yet he offered little clarity about what he is seeking in exchange for lowering levies — or whether he’s willing to offer relief at all. He rejected a European Union proposal to drop tariffs on all bilateral trade in industrial goods with the US, and threatened to slap China with an additional 50% import tax.
“The markets have come very far, very fast,” said Michael Kelly, global head of multi asset at PineBridge Investments. “It’s time for them to stabilize and figure out what the next turn of events is: up because the tariffs are coming down or down because the global economy is going down.”
Treasuries pared some of yesterday’s heavy losses — at one stage longer-dated yields were up the most since March 2020. Investors will look to bond sales Tuesday to see if there’s any sign of a crack in demand with the US set to sell three- and 10-year notes and 30-year bonds.
“Last night’s price action was more about de-risking and taking profit on those trades which are in the money to cover losses on other assets such as equities,” said Damien McColough, Sydney-based head of fixed income research at Westpac Banking Corp.
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Benchmarks in Hong Kong and China advanced as state-linked funds scooped up assets and the central bank promised loans to help stabilize the market.
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Traders’ bets on how much the Federal Reserve will lower US interest rates this year have been fluctuating. At least three reductions are now reflected in overnight interest-rate swaps this year, with the first fully priced in for June. Fed Chicago President Austan Goolsbee said there’s a lot of anxiety among business leaders that tariffs could spark widespread supply disruptions and renew inflationary pressures.
In commodity markets, oil was steady after a three-day tumble. Gold pushed higher.
Some of the main moves in markets:
Stocks
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S&P 500 futures rose 1.5% as of 6:42 a.m. New York time
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Nasdaq 100 futures rose 1.3%
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Futures on the Dow Jones Industrial Average rose 2%
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The Stoxx Europe 600 rose 1.6%
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The MSCI World Index rose 0.7%
Currencies
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The Bloomberg Dollar Spot Index fell 0.3%
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The euro rose 0.2% to $1.0938
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The British pound rose 0.3% to $1.2766
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The Japanese yen rose 0.6% to 146.95 per dollar
Cryptocurrencies
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Bitcoin rose 0.3% to $79,132.54
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Ether was little changed at $1,570.66
Bonds
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The yield on 10-year Treasuries declined two basis points to 4.16%
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Germany’s 10-year yield advanced two basis points to 2.63%
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Britain’s 10-year yield declined three basis points to 4.59%
Commodities
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Sujata Rao, Michael Msika and Anand Krishnamoorthy.
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