Markets came roaring back on Tuesday, snapping a four-day skid as hopes for a thaw in US-China trade tensions sparked a broad-based rally. The Dow surged more than 1,000 points, while the S&P 500 and Nasdaq each gained over 2.5%. Investor sentiment turned after Treasury Secretary Scott Bessent told a group of Wall Street executives that a de-escalation in the trade war was likely, providing much-needed clarity after a bruising start to the week. Safe-haven demand remained elevated, with gold briefly spiking above $3,500 before pulling back. While uncertainties linger around Fed policy and political risks, the day’s gains offered a breather from recent turbulence.

Key Takeaways:

  • Dow Posts Biggest Gain of the Year, Up Over 1,000 Points: The Dow Jones Industrial Average jumped 1,016.57 points, or 2.66%, to close at 39,186.98, snapping a four-day losing streak. The rally was fuelled by remarks from Treasury Secretary Scott Bessent signalling a likely de-escalation in trade tensions with China. At its peak, the index was up more than 1,100 points.
  • S&P 500 Recovers as Investors Shake Off Tariff Fears: The S&P 500 rose 2.51% to settle at 5,287.76, regaining ground lost in Monday’s sharp selloff. Broad gains across sectors reflected a rebound in risk appetite, with optimism rising that trade-related headwinds may begin to ease.
  • Nasdaq Surges Led by Tech and AI Optimism: The Nasdaq Composite climbed 2.71% to finish at 16,300.42, reversing steep losses from the prior session. Strength in artificial intelligence stocks and chipmakers contributed to the index’s outperformance, with investors welcoming signs of trade stability.
  • Europe Ends Higher As ECB Signals Progress on Inflation: European markets closed higher Tuesday after ECB President Christine Lagarde said the euro area’s disinflation process was “nearing completion.” The pan-European Stoxx 600 rose 0.25%, while the FTSE 100 added 0.64% to close at a fresh April high. France’s CAC 40 rose 0.56%, Germany’s DAX gained 0.4%, and Italy’s FTSE MIB reversed early losses to finish up 0.7%. The region also digested a growth downgrade from the IMF, which cut its UK forecast to 1.1% for 2025, down 0.5 percentage points from January.
  • Asia Mixed as Trump’s Fed Attacks Shake Confidence: Asian markets struggled for direction following Monday’s selloff on Wall Street and renewed political pressure on Fed Chair Jerome Powell. Japan’s Nikkei 225 dipped 0.17%, while South Korea’s Kospi finished flat. Mainland China’s CSI 300 was unchanged (close at 3,783.95), but Hong Kong’s Hang Seng rose 0.78% as EV battery giant CATL unveiled new superfast charging technology. Australia’s ASX 200 slipped 0.03%, and sentiment remained cautious across the region.
  • Bitcoin Breaks $90,000 As Investors Flee Dollar Turmoil: Bitcoin surged past the $90,000 mark, rallying more than 4% on the day. The cryptocurrency has now gained over 8% in two days as investors sought alternatives to the volatile dollar and turbulent equity markets. Earlier in the session, Bitcoin touched $91,555, its highest level since early March, reinforcing bullish momentum amid macro uncertainty.
  • Oil Rises on Iran Sanctions and Equity Rebound: Oil prices recovered from Monday’s slump, boosted by new US sanctions on an Iranian shipping magnate and broader equity strength. Brent crude gained $1.18 to $67.44 per barrel, while WTI added $1.23 to settle at $64.31. Russia’s economy ministry also revised its Brent forecast lower by nearly 17%, which limited the upside. Nonetheless, risk sentiment returned to energy markets, lifting prices.
  • Treasury Yields Steady as Trade Outlook Improves: The 10-year US Treasury yield held near 4.401%, little changed on the day. The 2-year yield rose 7 basis points to 3.821%. Yields recovered from earlier lows after Bessent’s remarks gave investors a potential path forward on trade. Despite recent volatility in Treasurys, markets welcomed signs of easing global tensions.

FX Today:

  • EUR/USD Pulls Back After Touching 2025 Highs: EUR/USD declined 0.79% to close at 1.1422 after reaching a new 2025 high of 1.1515 earlier in the session. The pair remains in a strong uptrend, supported by persistent dollar weakness and growing confidence in the ECB’s tightening stance. Price action is well above the 50-day SMA ($1.0830), which recently crossed above the 100- and 200-day SMAs, confirming bullish momentum. The pullback is viewed as a healthy correction after a sharp run, with support expected near 1.1250. Deeper downside could test the 1.1000 level, but the overall structure favours higher prices. A clean break above 1.1515 would target 1.1600–1.1700 in the coming weeks. Unless the dollar regains broad strength, EUR/USD retains a bullish bias.
  • GBP/USD Hits 8-Month High, Momentum Builds: GBP/USD rallied to 1.3333, up 1.06% on the day, after tagging a high of 1.3432—its strongest level since August 2024. The move extends a powerful uptrend that began in February near 1.2200, supported by stronger-than-expected UK data and sustained pressure on the US dollar. The pair now trades above all major SMAs, with the 50-day ($1.2890), 100-day ($1.2690), and 200-day ($1.2830) all trailing price and confirming bullish alignment. Traders are eyeing 1.3500 as the next major resistance. While some consolidation near current levels is possible, the breakout structure remains intact. Key support lies at 1.3200, and a deeper pullback could retest the breakout zone at 1.3000. 
  • Gold Pulls Back from Record High, Still Firmly Bullish: Gold (XAU/USD) slipped 1.41% to close at $3,375, retreating from an intraday surge that briefly took it above the $3,500 mark. The move reflects a round of profit-taking after an extended rally, though technicals remain firmly bullish. Gold is still trading far above its 50-day SMA ($3,025), 100-day SMA ($2,861), and 200-day SMA ($2,717), with all three moving averages rising sharply. The pullback likely reflects market digestion near psychological resistance, with interim support seen near $3,350 and stronger demand expected around $3,200. A break above $3,500 would confirm continuation of the breakout, potentially targeting $3,600. 
  • USD/JPY Faces Resistance as Bearish Pattern Holds: USD/JPY closed at 141.59, up 0.52%, but remains mired in a broader downtrend that has taken the pair from March highs above 151.00 to multi-month lows. Price action remains capped below all major SMAs, with the 50-day ($148.18), 100-day ($151.52), and 200-day ($150.31) levels now serving as major resistance zones. Despite today’s bounce, the pair is forming lower highs and lower lows, a hallmark of a bearish technical structure. Key support sits at 139.88, and a break below this level could lead to further downside toward 138.00. To regain upside traction, bulls would need to reclaim 145.00–146.00 and hold above the 50-day SMA. 
  • USD/CHF Struggles Near Multi-Year Lows Despite Bounce: USD/CHF ended at 0.8184, posting a 1.18% gain on the session, but the pair remains in a steep multi-week downtrend. It has now decisively broken below all major SMAs 50-day ($0.8270), 100-day ($0.8870), and 200-day ($0.876), highlighting sustained bearish momentum. Recent lows near 0.8100 marked levels not seen in years, reflecting a sharp decline in dollar strength and consistent inflows into the Swiss franc as a safe haven. While today’s rebound suggests short-term stabilisation, resistance looms near 0.8300 and 0.8450. Unless the pair reclaims the 0.8500 handle and establishes a higher low, downside risks persist. Bears continue to dominate the broader structure, with 0.8000 seen as the next key target.

Market Movers:

  • 3M Jumps on Earnings Beat: Shares of 3M surged 8.1% after the company reported better-than-expected first-quarter results. Adjusted earnings came in at $1.88 per share on $5.78 billion in revenue, topping consensus estimates of $1.77 and $5.76 billion, respectively. 
  • RTX Sinks as Tariff Comments Weigh on Outlook: RTX dropped nearly 10% despite delivering stronger-than-expected quarterly earnings. Investor sentiment turned negative after management flagged tariff-related headwinds during the earnings call.
  • Northrop Grumman Plunges After Cutting Guidance: Shares of Northrop Grumman tumbled 13% after the defence contractor slashed its full-year EPS outlook to a range of $24.95–$25.35, down from $27.85–$28.25 previously. 
  • Halliburton Slides on Tariff Impact Warning: Halliburton fell 5.2% after management warned that Trump’s tariffs would reduce Q2 earnings per share by 2 to 3 cents. 
  • Calix Soars on Strong Earnings and Guidance: Calix stock rose 13% after the tech firm delivered upbeat Q1 results and issued positive forward guidance. The company reported 19 cents in adjusted EPS on $220.2 million in revenue, beating expectations of 13 cents and $207.1 million. 
  • GE Aerospace Gains on Earnings Surprise: GE Aerospace advanced 6% after reporting first-quarter adjusted earnings of $1.49 per share, above analysts’ forecast of $1.27. 
  • Sportradar Rallies on Double Upgrade from BofA: Sportradar jumped 9% after Bank of America upgraded the stock two notches—from “underperform” to “buy.” The firm sees significant upside from the global rise in online sports betting and increased data licensing opportunities.

Tuesday’s rally offered a much-needed reset for investors following days of punishing losses, as dovish trade comments from Treasury Secretary Bessent helped restore confidence in risk assets. While equities surged and Bitcoin climbed back above $90,000, underlying tensions remain—from uncertain Fed policy to escalating political rhetoric and volatile macro data. Gold’s earlier spike to record highs and resilient Treasury yields underscore persistent caution in markets. With growth downgrades from the IMF and inflation still on central bank radars, traders will stay tuned for further signals on trade, monetary policy, and economic resilience heading into the rest of the week.