Global Markets React to US-China Trade Talks

The UK and India have agreed on a bilateral trade deal that will remove tariffs on most goods within a decade. Meanwhile, US President Donald Trump's comments on trade deals, stating that the US doesn't need them, caused markets to fall. The S&P 500, Dow Jones, and Nasdaq all declined. In contrast, Advanced Micro Devices reported better-than-expected earnings and strong guidance. US Treasury Secretary Scott Bessent is set to meet Chinese Vice Premier He Lifeng in Switzerland to discuss trade matters, potentially indicating a reconstruction of global trade relationships fractured by Trump's tariffs. JPMorgan strategists warn that the US "is not a good place to hide" in the event of a global economic slowdown.

The UK and India have agreed a trade deal after three years of talks, making it easier for UK firms to export goods such as whisky, cars, and cosmetics to India, and cutting taxes on Indian clothing and footwear exports. The deal is expected to boost trade by £25.5bn a year by 2040, with total trade between the two countries having totalled £42.6bn last year. Tariffs on UK gin and whisky will be halved to 75%, and those on higher-value UK-made cars exported to India will fall to 10% subject to a quota. The agreement also includes provisions on services and procurement, and a three-year exemption from social security payments for some Indian and British workers. The UK government hailed the deal as "landmark" and the "biggest and most economically significant" bilateral trade agreement since Brexit.

Asian markets rose on hopes of de-escalating US-China trade tensions after reports that US Treasury Secretary Scott Bessent and trade representative Jamieson Greer will meet with Chinese officials in Switzerland. Hong Kong's Hang Seng index jumped 2.07% following China's central bank announcement to cut key interest rates to boost growth. Other regional markets, including Japan's Nikkei 225 and Australia's S&P/ASX 200, also saw gains. Asian currencies strengthened against the dollar amid decreased confidence in the greenback. Meanwhile, US stock futures advanced as investors awaited the Federal Reserve's interest rate announcement.

Stock futures rose on Tuesday night as investors awaited the Federal Reserve's interest rate decision on Wednesday. Dow Jones Industrial Average futures added 270 points, or nearly 0.7%, S&P 500 futures popped 0.8%, and Nasdaq 100 futures rallied about 1%. The gains followed news that US Treasury Secretary Scott Bessent and top trade official Jamieson Greer would meet with Chinese counterparts in Switzerland, seen as a positive sign for trade negotiations. The Fed is expected to hold interest rates steady, with traders closely watching Fed Chair Jerome Powell's post-decision press conference for insights into the path of rates and the economy.

Treasury Secretary Scott Bessent and U.S. trade representative Jamieson Greer will meet with Chinese counterparts in Switzerland to discuss trade matters, a step toward potentially resolving the ongoing trade war between the U.S. and China. The trade war was ignited by President Donald Trump, who recently increased tariffs on Chinese imports to 145%. Bessent stated that the current tariff war "isn't sustainable" and that de-escalation is necessary before further negotiations can occur. The meetings are seen as a major development, with stock futures rising sharply on the news.

Stocks are expected to be impacted by several key events and market trends on Wednesday. The US Treasury Secretary and US Trade Representative are set to meet with Chinese officials, which will be closely watched amid trade tensions, with the S&P 500 down 1% since President Trump's April 2 tariff announcement. The healthcare sector was under pressure on Tuesday, with the Pharma, Biotech and Life Sciences S&P industry group falling 4.37%, as the White House proposed budget cuts and a critic of the pharma industry took over the FDA's vaccine program. The Federal Reserve is set to announce its interest rate decision at 2 p.m. ET, with the 10-year Treasury note yield at 4.29%. Oil prices rose over 3% on Tuesday but remain down 17% in 2025. Vistra is set to report earnings before the bell, while Uber Technologies will report quarterly numbers and appear on "Squawk Box" Wednesday morning, and AMD CEO Lisa Su will be live on "Squawk on the Street" after the company reported an earnings beat on Tuesday.

US President Donald Trump's top trade officials are meeting with Chinese counterparts in Geneva, Switzerland, to discuss de-escalating their trade war, which has had a damaging impact on both economies and the global economy. The US has imposed a 145% tariff on most Chinese imports, while China has responded with a 125% tariff on some US imports, causing trade between the two countries to drop dramatically. Economists predict that Trump's trade war could lead to a recession in the US and slow global growth. Although a trade deal is unlikely, any thaw in the trade war could be a welcome sign for businesses and consumers. The talks are seen as a first step towards de-escalation, with Treasury Secretary Scott Bessent saying it could take two to three years for trade to normalize with China.

The US and China will hold their first formal trade talks since President Trump raised tariffs on Chinese imports to triple-digit levels last month. The talks will take place in Geneva, Switzerland, between US Treasury Secretary Scott Bessent, US Trade Representative Jamieson Greer, and Chinese Vice Premier He Lifeng. The meeting aims to defuse a trade standoff that has persisted for a month, with both sides appearing interested in reducing tariffs. The Trump administration has criticized China for unfair trade practices, while China has called the tariffs "illegal and unreasonable." Businesses have complained that high tariffs have brought trade to a halt, with the US share of imported goods from China falling to its lowest level in over two decades.

China has warned the US against using dialogue as a means of "coercion" ahead of critical trade talks between senior officials from both countries in Switzerland. US Treasury Secretary Scott Bessent and US Trade Representative Jamieson Greer will meet with China's Vice-Premier He Lifeng, with the talks expected to focus on "de-escalation" rather than a major trade deal.

China's central bank and financial regulators announced measures to bolster growth amid trade worries, including cutting the seven-day reverse repurchase rates by 10 basis points to 1.4% and lowering the reserve requirement ratio by 50 basis points, unleashing $138.6 billion in liquidity. The central bank will also reduce mortgage rates and establish a 500-billion-yuan relending tool for consumption and elderly care. Additional measures to support small and medium enterprises and the private sector are expected soon. The announcements come ahead of trade talks between Chinese Vice Premier He Lifeng and U.S. Treasury Secretary Scott Bessent in Switzerland.

European markets are expected to open mixed as traders await the US Federal Reserve's monetary policy announcement. The FTSE 100 is expected to open lower, while the DAX, CAC, and FTSE MIB are expected to open higher. Investors are looking to Fed Chair Jerome Powell's comments for insights into interest rates and the economy. A busy day of earnings is ahead, with several major companies reporting, and European retail sales data is also being released. Overnight, US stock futures rose after news of US-China trade talks, and Asian markets gained, led by Hong Kong, after China's central bank cut interest rates.

China's central bank cut interest rates and made it easier for banks to lend money to shore up the economy, which has been hit by the trade war with the United States. The bank reduced its reserve requirement ratio, freeing up $139 billion in liquidity, and cut its benchmark seven-day interest rate to 1.4% from 1.5%. The moves are part of a "moderately loose" monetary policy aimed at keeping the economy moving amid global uncertainties and trade tensions. The announcement came ahead of a meeting between top US and Chinese officials to discuss trade, and China's recent report of a slowdown in manufacturing activity due to the trade war.

China's major financial regulators announced measures to stabilize the country's economy and capital markets amid the escalating trade war with the US. The People's Bank of China, the National Financial Regulatory Administration, and the China Securities Regulatory Commission held a joint press conference to present their plan, which includes aid to exporters, private and small businesses, and measures to boost domestic consumption and stabilize the job market.