In the Midst of Trade Talks, Stocks Rise on Earnings

U.S. stock futures signaled a third consecutive day of gains, supported by upbeat corporate earnings and cautious optimism ahead of the Trump administration’s upcoming trade discussions with China.

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Early Friday, futures tied to the S&P 500 were up 0.2%, while German stocks reached fresh record highs. Although markets were momentarily unsettled when President Donald Trump floated the idea of imposing an 80% tariff on Chinese goods via social media, they quickly stabilized. Meanwhile, Brent crude climbed past $64 a barrel, the dollar index slipped, and U.S. Treasury yields steadied.

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Shares of Pinterest Inc. surged by 15% in early trading after the company issued revenue guidance that exceeded Wall Street expectations. Other tech names like CloudFlare Inc. and ride-hailing firm Lyft Inc. also posted gains thanks to strong quarterly results. However, not all earnings news was positive — shares of Expedia Group Inc. fell after the company cut its forecast for bookings growth, disappointing investors.

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Market sentiment has been closely tied to the potential easing of tensions between the U.S. and China, although Trump’s sharp comments on Friday reminded investors that a swift resolution might not be in the cards. Still, the start of new negotiations is keeping optimism alive.

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Treasury Secretary Scott Bessent and U.S. Trade Representative Jamieson Greer are scheduled to meet with Chinese Vice Premier He Lifeng in Switzerland over the weekend, marking the first round of public trade discussions between the world’s two largest economies in some time.

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In Europe, Germany’s DAX Index became the first major European stock benchmark to surpass the record high it set back in March. The index climbed as much as 0.8% to reach 23,528.88, surpassing its previous intraday peak from March 18 and fully recovering losses triggered by the trade war. Meanwhile, in Asia, MSCI’s key benchmark gauge rose 0.7%, setting it on track for its fourth consecutive week of gains.

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However, not all regional markets shared in the rally — Indian stocks and bonds continued to decline amid rising tensions and hostilities with neighboring Pakistan.

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Here’s a closer look at some of the key market moves across different asset classes:

Stocks:
— As of 8:12 a.m. New York time, S&P 500 futures had risen 0.2%.
— Nasdaq 100 futures were up 0.3%, reflecting strength in the tech sector.
— Futures tied to the Dow Jones Industrial Average gained 0.2%.
— Europe’s Stoxx 600 advanced 0.4%, helped by gains in German stocks.
— The MSCI World Index, which tracks global equities, ticked up 0.1%.

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Currencies:
— The Bloomberg Dollar Spot Index fell 0.2%, signaling a modest pullback for the greenback.
— The euro climbed 0.2% to trade at $1.1253.
— The British pound strengthened 0.2% to $1.3275.
— The Japanese yen rose 0.5% to 145.21 per dollar, reflecting some safe-haven demand.

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Cryptocurrencies:
— Bitcoin edged up 0.3%, reaching $102,890.56.
— Ether saw a stronger move, jumping 6.8% to $2,335.15.

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Bonds:
— The yield on the 10-year U.S. Treasury note inched up by one basis point to 4.39%.
— Germany’s 10-year government bond yield rose four basis points to 2.57%.
— The U.K.’s 10-year yield advanced five basis points to 4.59%.

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Commodities:
— West Texas Intermediate (WTI) crude climbed 1.4% to $61.10 per barrel, supported by broader risk-on sentiment.
— Spot gold gained 0.8%, trading at $3,333.39 an ounce, as investors sought a hedge against geopolitical uncertainty.

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Overall, investors appear cautiously optimistic heading into the weekend, buoyed by solid corporate earnings reports and the possibility of progress in U.S.-China trade negotiations.

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However, markets remain sensitive to geopolitical headlines, particularly when it comes to trade relations and regional tensions, as seen in the movements of Indian assets. Trump’s abrupt mention of massive tariffs on Chinese imports was a reminder that these negotiations could face serious hurdles, and markets will be closely watching for any updates over the weekend.

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The combined effect of earnings beats, potential trade developments, and resilient global stock markets has kept risk appetite alive, even as the bond market shows a measured rise in yields.

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Commodities like oil and gold are also reflecting this cautious optimism, with crude prices climbing on stronger sentiment and gold holding its ground as a protective asset. Meanwhile, the foreign exchange market shows the dollar slightly weaker, allowing other major currencies like the euro, pound, and yen to firm up.

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In summary, this confluence of factors is setting up global markets for a positive end to the week, provided that the weekend’s trade talks do not deliver any major negative surprises. Investors remain hopeful that the U.S. and China can find some common ground, but they are also prepared for volatility, given the unpredictability of negotiations and geopolitical risks.

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