Less than 14 hours after imposing taxes, Trump unexpectedly changed his position, gold spiked by 100 USD/oz, and US stocks saw their biggest surge in 17 years. What’s behind this sudden turnaround?
1. Rapid Changes in US Tax Policy
President Trump unexpectedly postponed the reciprocal tax policy for 90 days with most countries. However, one Asian country still faces a tax rate of up to 125%, causing oil prices to surge more than 4%. Less than 14 hours after implementation, Trump “reversed course,” announcing open negotiations and potential tax exemptions for certain businesses, likely aimed at reducing inflation and recession risks.
2. Gold Prices Skyrocket, Investors Seek Safe Havens
Instability from tax policies has driven strong capital flow into gold. International gold prices increased by over 100 USD/oz, the strongest in 18 months. The SPDR Gold Trust also bought nearly 12 tons of gold, signaling heightened defensive sentiment.
3. US Stocks Soar to Historic Levels
Trump’s move to “cool down” tariffs has sparked a rally in the US stock market:
Nasdaq +12.16% – the strongest increase since 2001
S&P 500 +9.52%
Dow Jones +7.87%
This is considered one of the most impressive recoveries in the past 17 years.
4. Business and Geopolitical Developments
Trump declared that he didn’t want US Steel to fall into the hands of a Japanese company, although he “greatly admires Japan.” Following the statement, US Steel shares plummeted by over 11% after hours. He also ordered a security-related investigation into the deal.
In another move, the US is considering imposing a “port fee” on Chinese ships to reduce dependency and encourage smaller ships and retail container vessels.
5. Signals from Asia – Europe
Australia and the EU have officially resumed free trade negotiations after more than two years of suspension due to agricultural product disagreements.
In South Korea, Lee Jae-myung announced his candidacy for President, marking his return to politics after resigning as Chairman of the Democratic Party.
6. Market Sentiment: Gold Shines – Fed Remains Cautious
CITIC Securities warns: gold signals are very positive amidst rising instability.
Meanwhile, the Fed Watch Tool indicates a 76.1% probability that the Fed will keep interest rates unchanged in May, while expectations for a rate cut are diminishing.
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