European markets and U.S. stock index futures rose at the start of trading Tuesday, buoyed by an agreement over the weekend between the E.U. and the U.S. to pause trade tensions, which came shortly after President Trump had threatened to impose a 50% tariff on goods imported from Europe.
The futures contracts for the S&P 500 advanced by 1.5% ahead of trading commencement, those for the Nasdaq increased by 1.6%, and the ones for the Dow Jones Industrial Average moved up by 1.4%. These early gains managed to offset entirely the declines experienced on Friday following President Trump’s aggressive stance towards EU trade policies.
Early Friday, markets plunged as Trump stated on social media that negotiations with the EU were making little progress and warned that “tariffs of up to 50% might be implemented starting June 1.”
On Sunday, Trump announced that he would postpone the proposed 50% tariff on products from the EU until July 9. This extension aims to provide more time for negotiations between the trading partners.
The European Union’s top trade negotiator stated on Monday that he had productive conversations with representatives from the Trump administration and emphasized that the union is entirely dedicated to concluding a trade agreement by the July deadline.
During midday in Europe, London’s FTSE 100 rose by 0.8% as it resumed trading following a UK public holiday on Monday.
Germany’s DAX rose by 0.7%, and the CAC 40 in Paris gained 0.2%.
Tesla’s European sales continued their downward trend for the fourth successive month, despite the overall electric vehicle market gaining momentum, as reported by an industry trade association.
In April, sales of Tesla cars across 32 European nations dropped by 49%, totaling 7,261 units compared to 14,228 during the corresponding period the previous year, as reported by the European Automobile Manufacturers’ Association. However, overall sales figures for battery electric vehicles from all carmakers increased approximately 28%.
These figures represent the most recent evidence of how the Tesla brand is being adversely affected due to the criticism directed at billionaire CEO Elon Musk regarding his extreme right-wing ideologies.
In spite of the bleak sales numbers, Tesla’s stock price increased by 2.1% during pre-market trading on Tuesday, possibly driven by hopes for a transatlantic trade agreement between Europe and the United States.
Shares of Southwest Airlines climbed nearly 3% during early morning trade as the company gears up to introduce a new fee system starting Wednesday, which will require most customers to pay for checking their luggage. For many years, Southwest marketed itself with an emphasis on allowing flyers to bring up to two suitcases at no extra cost. However, facing increasing demands from activists seeking higher profitability and revenues, the airline is now adjusting its policies.
Information regarding American consumer confidence and house pricing will be released later todayTuesday.
During Asian trading hours, Japan’s Nikkei 225 flipped initial declines to rise by 0.5%, finishing at 37,724.11 following comments from the central bank indicating an expectation of increasing interest rates over the next few months because of rising inflationary pressures.
The Governor of the Bank of Japan, Kazuo Ueda, pointed out increasing food costs, noting that rice prices have doubled over the last twelve months, as contributing factors. Currently, inflation rates in Japan exceed those in both the United States and Europe and surpass the BOJ’s targeted figure of around 2%.
But the central bank also has to take into account trade policies, he said without directly mentioning Trump’s tariff hikes. Risks from uncertainty for the global economy complicate the BOJ’s goal of raising its very low benchmark interest rate of 0.5%, Ueda said in a speech Tuesday.
“We are currently nearer to our objective than at any point over the past thirty years, although we haven’t reached it yet. Our recent progress has been distinctly influenced by supply-related disruptions,” Ueda stated.
Hong Kong’s Hang Seng rose 0.4% to reach 23,381.99, whereas the Shanghai Composite index decreased by 0.2% to stand at 3,340.69.
In South Korea, the Kospi dropped by 0.3% to reach 2,637.22.
The S&P/ASX 200 in Australia rose 0.6% to reach 8,407.60, whereas Taiwan’s Taiex dropped 0.9%. Meanwhile, in India, the Sensex declined by 1.2%.
The U.S. benchmark crude oil dropped slightly by 7 cents to reach $61.46 per barrel. Meanwhile, Brent crude, which serves as the global reference, decreased by 4 cents to stand at $64.08 per barrel.
The U.S. dollar climbed to 144.08 Japanese yen from 142.85 yen. Meanwhile, the euro dropped to $1.1348 from $1.1388.
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