Rudolph Angler U.S. stocks saw sharp early gains on Wednesday before retreating, as mixed signals from former President Donald Trump unsettled markets. The S&P 500 climbed as much as 3.6% during the day but closed up only 1.67%. Trump made headlines by promising large tariff cuts on Chinese imports, while also denying reports that he plans to remove Federal Reserve Chair Jerome Powell. The conflicting messages, however, created fresh uncertainty around U.S. trade policy, affecting investor confidence across global markets.
Confusion Over China Tariff Plans
Former President Trump stated he would “substantially” reduce tariffs on goods from China. This follows months of speculation over potential changes to U.S. trade policy. At the same time, key officials from his administration offered different views.
According to reports, the White House is considering a system that would lower tariffs on some goods to between 50% and 65%. Non-essential items might face a 35% duty, while critical goods could still be taxed up to 100%. Despite the drop, these rates would remain much higher than pre-trade war levels.
Treasury Comments Add to the Uncertainty
Speaking in Washington, Treasury Secretary Scott Bessent denied any plan to offer China unilateral tariff relief. He noted that the administration is looking at a wider set of tools beyond tariffs alone. Bessent also criticized China’s ongoing classification as a “developing country” in global economic terms. He said this status is outdated given China’s large economic influence and global trade power.
Car Part Tariffs and Canada Remarks
Additional confusion came when the Financial Times suggested that tariffs on Chinese auto parts could be lowered. Trump denied this quickly and suggested instead that Canadian car imports might face higher duties. This follows a recent move in which a 25% global tariff was applied to automobile imports—with USMCA countries temporarily exempt.
Such abrupt changes in direction are troubling markets. Many analysts point to the unpredictability of Trump’s policy style as a risk factor for both U.S. and global investors.
“Markets dislike uncertainty,” said Michael Brown, market analyst at Pepperstone in London. “This kind of volatile and inconsistent communication makes it hard for investors to plan. It weakens U.S. policy credibility.”
Stock Markets React with Uneven Results
The uncertainty spilled over into global markets. U.S. stock futures dipped in early Thursday trading. As of 6:00 a.m. CEST:
- Dow futures were down 0.28%
- S&P 500 fell 0.14%
- Nasdaq futures dropped 0.22%
Investors reacted to the lack of clear policy direction, with many choosing to reduce exposure to equities.
Asian markets showed a mixed response:
- Hang Seng Index: down 1.23%
- Nikkei 225 (Japan): up 0.58%
- Kospi (South Korea): down 0.33%
- ASX 200 (Australia): up 0.66%
In Europe, investor sentiment was slightly more positive. Germany’s DAX climbed 3.14%, reaching its highest level in a month. The Euro Stoxx 600 rose 1.8%, supported by steady inflation numbers and more predictable policy outlooks across the eurozone.
Currency and Commodities Move on Trade Tension
The euro fell against the U.S. dollar following Trump’s mixed messages on trade and central bank policy. By early Thursday, the EUR/USD was trading slightly above 1.13, a drop from Monday’s peak near 1.1566.
In commodity markets, gold prices rebounded as investors turned to safer assets. Spot gold rose 1.2% to $3,329 per ounce, recovering from recent declines. Gold futures gained 1.3%, reaching $3,338, showing rising demand for low-risk investments during times of uncertainty.
Market Watch: Investors Seek Stability
Analysts say the week’s events highlight how much impact political statements can have on financial markets. With major decisions hanging in the balance, investors are likely to remain cautious in the coming days.
“Every time there’s a new headline, the market moves,” said one trader from Frankfurt. “People are looking for clear guidance, and they’re not getting it.”