The Stock Market Bounces Back From April's Sell-off, Yields Rise

A global surge in equities picked up pace following news that China is reconsidering trade talks with the United States, fueling hopes that tensions over tariffs may start to ease. This optimism spread across financial markets, with Europe’s Stoxx 600 index climbing 0.9% — marking its ninth straight day of gains and the longest winning streak in nearly a year. U.S. stock futures also advanced, while shares across Asia jumped by 1.6%, lifted by signs that Chinese officials are open to renewed negotiations after senior American leaders expressed willingness to meet.

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“There’s a growing sense that the worst of the policy uncertainty might be behind us,” said Kevin Thozet, an investment committee member at Carmignac in Paris. He added, “Talks are underway, and President Trump appears to be softening some of his earlier stances. Combine that with a relatively upbeat earnings season, and the market environment doesn’t look all that bleak.”

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The S&P 500 has now posted gains for eight consecutive sessions — its longest rally since last August — driven by growing belief that the worst of the trade conflict may be fading. This rebound followed Trump’s decision on April 2 to implement a series of record-high tariffs, which had initially rattled markets. However, the recent shift in tone from both Washington and Beijing has reassured investors, despite some earnings disappointments from major companies.

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Investors are now eyeing Friday’s U.S. jobs report, which is the last key economic data release of the week. This report is expected to provide further clues on the health of the American economy. However, sentiment was slightly dampened by underwhelming results from two tech giants: Apple and Amazon.

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Gold, which often serves as a safe-haven asset during times of uncertainty, was poised for its second consecutive weekly loss — a first for the year — indicating that investors may be feeling less defensive. Meanwhile, U.S. 10-year Treasury yields remained steady, and the dollar slipped slightly against major currencies.

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The shift in market mood comes after China signaled that it is open to dialogue, potentially ending the current standoff between the world’s two largest economies. This change followed a recent escalation in tensions when Trump increased tariffs on Chinese goods, prompting retaliatory measures from Beijing. In the past, Trump had insisted that Chinese President Xi Jinping must initiate contact for any talks to begin.

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More recently, Treasury Secretary Scott Bessent reiterated that the next move should come from China to help ease the impasse.

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Although China’s Commerce Ministry indicated a willingness to talk, it maintained that this stance was in line with its existing position. Beijing emphasized that any negotiations would require the U.S. to demonstrate sincerity by reversing what it called “unilateral and incorrect” actions — namely, the tariffs.

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Steven Leung, executive director at UOB Kay Hian in Hong Kong, welcomed the development, saying, “This is a positive step forward, regardless of which side makes the first move. Financial markets should experience a wave of short covering, as expectations for resolving the stalemate continue to build.”

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While hopes for progress in trade relations lifted markets, other political developments added complexity to the outlook. President Trump is preparing to propose major cuts to domestic government agencies while seeking increased funding for the military in his preliminary 2026 budget plan, which is expected to be unveiled on Friday. This could trigger further debates in Congress and add another layer of policy uncertainty.

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In corporate news, Apple’s stock fell 1.6% in after-hours trading following the release of its quarterly earnings. Although the company reported solid overall performance, a steeper-than-expected decline in sales from China weighed on investor sentiment. Similarly, Amazon’s shares dropped 3.5% in late trading after the company issued a weaker-than-expected operating income forecast, despite otherwise strong results.

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In summary, the global equity rally has gained fresh energy from growing optimism over renewed U.S.-China trade negotiations. While encouraging signs are emerging from both governments, market participants remain cautious, especially as key data like the U.S. employment report and corporate earnings continue to shape the economic picture. For now, the mood is upbeat, but investors are watching closely for any new developments that could tilt sentiment in either direction.

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