Closing summary
Stock markets are rallying in Asia, Europe and the US and the dollar has risen.
Anxiety among investors has given way to relief, at least for now, after Donald Trump said his tariffs on China would come down “substantially” and he had “no intention” of firing the chair of the American central bank, Jay Powell.
The German stock market leapt 3.2% while the UK’s FTSE 100 is 1.1% ahead, and the Nasdaq in New York jumped by 3.95.
The dollar is up by 0.5% against a basket of major currencies.
The rally comes despite gloomy business surveys for the UK, Europe and the US that show trade tariffs and uncertainty are beginning to take their toll.
Meanwhile gold, seen as a safe-haven investment in times of turmoil dropped back by 3.2% to $3,277 an ounce. Yesterday, it broke through $3,500 an ounce.
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Thank you for reading. We’ll be back tomorrow. Bye! – JK
Updated
US business activity hits 16-month low in wake of tariffs
Business activity in the US has hit a 16-month low as confidence slumped, and companies raised their prices at a faster rate, according to a survey that showed a negative impact from Donald Trump’s tariffs.
The headline US PMI Composite Output Index from S&P Global fell from 53.5 in March to 51.2 in April, according to the preliminary ‘flash’ reading. This means the private sector is still expanding, but at a slower row, after a three-month high in March.
Growth with the services sector slowed sharply to only a modest pace, registering the second-weakest expansion recorded over the past year, in response to slower order book growth. Firms flagged uncertainty surrounding the economy and tariffs.
Demand growth was subdued in particular by a fall in exports of services (which include tourism-related activities as well as cross-border activities by service providers) on a scale not seen since January 2023.
Manufacturing output meanwhile edged back into growth after slipping into decline in March, though the expansion was only marginal. Whilst new orders placed at factories rose at a slightly faster rate, linked to higher domestic orders, the increase was only modest and curbed by a marked fall in export orders.
While tariffs had in some instances reportedly helped drive new sales to domestic customers, trade policy was widely linked to falling foreign sales.
Sentiment among companies about their output over the coming year fell for a third successive month, dropping sharply to register the least optimistic outlook since July 2022. The latest reading was the joint-second lowest since September 2020, surpassed only by October 2022.
