📆 Tuesday, April 8
► European stocks mounted a modest recovery on Tuesday after suffering their worst three-day slump in five years. The European Stoxx 600 rose 1.5%, led by defense shares and banks, notably were gains of Siemens and ASML, after plunging over 12% in the past four sessions. The rebound was driven by bargain hunting and optimism over potential tariff negotiations, but sentiment remained fragile as the European Commission proposed 25% counter-tariffs on a range of U.S. goods. The list targets U.S. exports like diamonds, soybeans, almonds, and poultry, with tariffs set to take effect starting May 16. SmartTrader Chief Analyst Robert Lindner sees the EU's response as very moderate and with long notice showing the EU's willingness to de-escalate. EU Officials are increasingly alarmed about the economic fallout of Trump’s tariff spree, especially after Trump dismissed the EU’s “zero-for-zero” proposal and demanded $350 billion in U.S. energy purchases to resolve the trade imbalance.
► U.S. stock futures pointed higher Tuesday morning following Monday’s tumultuous session, which saw all three major indexes close modestly lower. The S&P 500 (+ 1.4%), and Nasdaq (+ 1.2%) see gains in pre-market trading, with traders cautiously optimistic about potential relief from the ongoing selloff. Investors remained fixated on Trump’s erratic tariff policy, particularly his threat to impose an additional 50% tariff on Chinese goods starting Wednesday. Meanwhile, speculation about Federal Reserve rate cuts continued to intensify, with at least three reductions expected this year and the first fully priced in for June. While some, including BlackRock’s Larry Fink, saw long-term buying opportunities, Goldman Sachs strategists warned that recession risks are mounting and the market may be entering a cyclical bear phase.
► Asian markets rebounded sharply as signs of potential U.S. negotiations with key trading partners boosted sentiment. Japan’s Nikkei 225 surged over 6% after Trump prioritized Tokyo in upcoming tariff talks, placing it ahead of other nations vying for relief. China’s Shanghai Composite rose over 1.5%, and the Shenzhen Component added over 0.6%, as state-linked funds stepped in to buy local stocks and the central bank pledged financial support to stabilize capital markets. Hong Kong’s Hang Seng Index rose 1.4%, attempting to recover from its steepest one-day plunge since 2008. However, trade tensions remained high, with China pledging to retaliate (again) if the U.S. follows through on its latest tariff threats.
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