Morning Bid: Trade talks at last

May 7, 2025 - By 4idiotz

Table of Contents

Article Summary

U.S. and global markets are closely watching U.S.-China trade talks and the Federal Reserve’s policy decision, as geopolitical tensions in Asia and a potential de-escalation in the trade spat impact markets. The Chinese central bank has announced rate cuts and stimulus measures, and investors remain cautious about prospects for a breakthrough in tariff negotiations. The Trump Administration’s policy of ‘strategic ambiguity’ is also affecting investors.

Original Post

By Mike Dolan

LONDON (Reuters) – What matters in U.S. and global markets today

By Mike Dolan, Editor-At-Large, Financial Industry and Financial Markets

Wall Street’s latest stutter seems to have been cut short, as stock futures welcomed the announcement of upcoming U.S.-China trade talks and a fresh bout of monetary easing from the People’s Bank of China to boot.

In today’s column, I discuss what the Trump administration’s use of “strategic uncertainty” means for the dollar.

Now, onto all of this morning’s market news.

Today’s Market Minute

* India attacked Pakistan and Pakistani Kashmir on Wednesday, and Pakistan said it shot down five Indian fighter jets in the worst fighting in more than two decades between the nuclear-armed enemies. Indian shares were lower on Wednesday morning, but had pared their early losses.

* U.S. Treasury Secretary Scott Bessent and chief trade negotiator Jamieson Greer will meet China’s economic tsar He Lifeng in Switzerland this weekend for talks that could be the first step toward resolving a trade war disrupting the global economy.

* Chinese authorities announced on Wednesday a raft of stimulus measures, including interest rate cuts and a major liquidity injection, as Beijing steps up efforts to soften the economic damage caused by the trade war with the United States.

* The moves in Asian FX markets in recent days have brought a regional conundrum into sharp focus: how much appreciation can Asian currencies countenance in the face of U.S. President Donald Trump’s global trade war? Read the analysis from Reuters’ columnist Jamie McGeever.

* Amid all the headlines around the U.S. minerals deal with Ukraine, Washington has pursued a potentially even more significant critical metals deal in the Great Lakes region of Africa. Read the analysis from Reuters’ columnist Andy Home.

Trade talks at last

Global stock markets held steady for the most part on Wednesday, as oil prices rose and gold prices fell following signs of a potential de-escalation in the U.S.-China trade spat.

U.S. and Chinese officials on Tuesday said Treasury Secretary Scott Bessent and chief trade negotiator Jamieson Greer will meet China’s top economic official He Lifeng in Switzerland this weekend.

Investors appear to remain cautious about prospects for any breakthrough in tariff negotiations, though. The dollar was down for a fourth session and European stocks dropped.

Meanwhile, China announced various stimulus measures on Wednesday, including rate cuts, more cash for the banking system and the expansion of a channel that helps insurance money flow into stocks. But the big story remains what will happen with U.S.-China talks this weekend.

What This Means for You

Investors should remain cautiously optimistic about prospects for U.S.-China trade talks, but should also be aware of the potential impact of geopolitical tensions in Asia on markets.
Pay attention to the Federal Reserve’s policy decision and press conference, as well as upcoming U.S. corporate earnings and data releases, for implications on your investments.
Stay informed about the impact of the trade war on the Chinese economy and potential repercussions on jobs and inflation.