US Stock Future Bounce and Gold Tops Record $3,500: Markets Wrap

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US Stock Future Bounce and Gold Tops Record $3,500: Markets Wrap

stock :: 2025-04-22 :: source - bloomberg

By John Viljoen

(Bloomberg) -- US stocks are set to bounce back from Monday’s losses as investors nervously weighed up progress on trade talks with India and Tesla Inc.’s upcoming earnings. Gold topped $3,500 for the first time.

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While S&P 500 contracts added 1% in early trading, the conversation on Wall Street was still focused on the implications of any White House effort to replace Federal Reserve Chair Jerome Powell. The dollar and Treasuries steadied. The yen strengthened beyond 140 per dollar for the first time since September.

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In Europe, the Stoxx 600 index dropped as traders returned from the Easter break. Novo Nordisk A/S slumped almost 10% on concern it faces tougher competition from Eli Lilly & Co.’s experimental weight loss pill.

Concerns that Donald Trump may be preparing to fire Powell have added to unease for traders already grappling with the turmoil unleashed by the president’s tariff onslaught. Trump’s policies and his broadsides against the Fed have forced a reappraisal of the dollar and Treasuries as havens at times of stress.

“With increasing rhetoric from the administration admonishing the Fed to cut rates and the markets entertaining intensifying discussions about the possibility of replacing the Fed chair, we don’t expect a rush back into the market from abroad,” John Velis, a strategist at Bank of New York Mellon, said of US bonds. “The haven status of such assets is increasingly in question.”

The yen outperformed on Tuesday, with the Bank of Japan said to be on course to keep raising rates. Meanwhile, China let the yuan weaken against almost all major currencies to support its economy as the trade war with the US deepens.

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“Market volatility though is driving some haven flow into the yen,” said Shoki Omori, chief desk strategist at Mizuho Securities Co. in Tokyo. “Reports the BOJ sees little need to change their stance on rate hikes are also aiding sentiment in the currency, while denting the dollar.”

In a sign that nations are attempting to navigate the tussle between the US and China, a high-level Japanese delegation will deliver a letter from Prime Minister Shigeru Ishiba to Chinese leader Xi Jinping this week. Beijing earlier warned nations against making agreements with Washington that hurt China.

The US said it’s made “significant progress” toward a bilateral trade deal following talks between Vice President JD Vance and Indian Prime Minister Narendra Modi on Monday. Thailand, which is seeking a reprieve from Trump’s plan to levy a 36% tariff on its goods, said ministerial level talks previously scheduled for this week have been delayed.

“Optimism appears to be fading, with markets potentially beginning to price for a less favorable outcome” in tariff talks, wrote Jun Rong Yeap, market strategist at IG Asia. “Talks are likely to drag on for longer.”

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