Monday Afternoon Coffee - Markets Update - 12 May 2025 - Markets Surge as U.S. and China Agree to 90-Day Tariff Truce; Gold Plunges

The Trade Academy Team
4 hours ago
2 min read

Markets Update: U.S. stocks soared Monday and the dollar rallied after Washington and Beijing struck a surprise deal to temporarily slash tariffs, signaling a pause in the escalating trade war and offering a reprieve to jittery markets.

Global Markets Roundup: 12 May 2025

Stocks Rally on Trade Breakthrough

Following high-stakes weekend talks in Geneva, the U.S. agreed to reduce tariffs on Chinese imports from 145% to 30% for a 90-day window, while China lowered its own levies from 125% to 10%. The move reignited investor optimism and drove a broad-based risk-on rally. S&P 500: +3%. Nasdaq Composite: +4.1%.

MSCI’s global index jumped 1.8%, clawing back losses from the April 2 tariff shock. Europe’s STOXX 600 rose 1.2%, while Hong Kong’s Hang Seng surged nearly 3%.

Dollar Soars, Safe-Havens Sink

The dollar index DXY climbed 1.25% as investors dumped haven assets. The Japanese yen tumbled 2.2% to 148.48 per dollar, and the Swiss franc fell 1.4%—a relief to exporters and the Swiss National Bank. Euro EURUSD: -1.2% to $1.1113. Swiss Franc (USDCHF) +1.4%. Yen USDJPY: +2.2%.

Gold Tumbles From Record Highs

Spot gold, which hit $3,500 last month, plunged 3% to $3,225.30 as the dollar strengthened and investors rotated out of defensive positions.

U.S. Treasury yields surged as money flowed out of government bonds. The 10-year yield rose nearly 8 basis points, mirroring similar moves in German Bunds and UK gilts. Analysts attributed the bond selloff to a rapid reassessment of recession risks.

Oil, Commodities Rebound

Brent crude gained 1.9% to $65.10 per barrel, up sharply from $57 a week earlier, as traders priced in lower chances of a trade-induced slowdown.

Outlook Cautious Despite Euphoria

While markets celebrated the 90-day reprieve, economists warned the underlying tensions remain. Data from China over the weekend showed factory-gate prices fell at their fastest rate in six months, and investors remain cautious ahead of major corporate earnings, including Walmart.

Looking forward refer to the economic calendar below to see the upcoming events scheduled for today and the rest of the week.

General news - Information source from multiple newswires.

The article and the data is for general information use only, not advice!

The Trade Academy Team