On May 12, 2025, global markets experienced a cautious rally following U.S.-China trade talks in Geneva. Negotiators described the discussions as “constructive” and reaching an “important consensus,” yet specifics, particularly regarding tariff reductions, were notably absent. A joint statement is anticipated later today to provide further clarity.
Despite the lack of concrete details, investor sentiment improved, with S&P 500 futures rising by 1.4% and Nasdaq futures by nearly 2%. European stock futures also saw gains. The U.S. dollar strengthened modestly, and Treasury yields increased as markets adjusted expectations for Federal Reserve rate cuts, now pricing in 63 basis points of easing for 2025.
Geopolitical tensions showed signs of easing, with a fragile ceasefire between India and Pakistan holding, and Ukrainian President Zelenskiy expressing readiness to meet Russian President Putin in Turkey.
Investors are also awaiting the U.S. Consumer Price Index data due Tuesday, which may offer insights into inflation trends, though the full impact of tariffs is expected to manifest in May’s data.
In summary, while markets are buoyed by the positive tone of the U.S.-China talks, the absence of detailed agreements keeps investors cautious as they await further developments.
Source: Reuters
