A ripple of optimism spread across global financial markets on Tuesday after reports suggested the United States plans to ease its hardline stance on auto tariffs. Investors welcomed news that the White House, under Donald Trump’s direction, will reportedly exempt automakers—already subject to 25% tariffs—from any further levies, aiming to prevent overlapping penalties that could stifle industry growth.
A Softer Trade Stance Sparks Confidence
The development, first reported by the Wall Street Journal, has been perceived as a key shift in tone from the Trump administration. Markets have responded in kind, buoyed by the prospect of trade negotiations rather than a fresh round of escalation.
“On tariffs, the latest newsflow was actually fairly positive at face value,” said Jim Reid, managing director at Deutsche Bank. “US officials continued to sound optimistic about potential trade deals. The rhetoric from the administration is still pointing towards negotiations.”
This apparent pivot has encouraged several countries to re-enter trade talks with Washington, seeking exemptions from the full brunt of wide-ranging US tariffs—particularly those impacting steel and aluminium.
Market Snapshot: Europe and Asia in the Green
European indices moved cautiously higher in response to the easing trade sentiment and a busy earnings season. Frankfurt’s DAX climbed 0.5 percent, supported by investor-friendly company updates. London’s FTSE 100 edged up 0.1 percent, while Paris’s CAC 40 slipped 0.3 percent under pressure from weaker earnings results.
Across Asia, the reaction was more measured. Hong Kong’s Hang Seng Index added 0.2 percent, while Shanghai’s Composite Index dipped 0.1 percent as investors digested mixed signals from ongoing US-China negotiations. US Treasury Secretary Scott Bessent told CNBC that discussions were ongoing but emphasized that the next move rests with Beijing.
Seoul gained ground, lifted by the positive impact of tariff relief news on major South Korean automakers Hyundai and Kia. Tokyo remained closed due to a public holiday.
Wall Street Awaits Tech Earnings, Economic Indicators
Investors in New York held a cautious but positive stance ahead of key earnings reports from tech giants including Amazon, Apple, Meta, and Microsoft. The Dow Jones Industrial Average rose by 0.3 percent to close at 40,227.59.
Attention is also turning to upcoming economic indicators, particularly data on US job creation and inflation—critical figures in determining whether trade-related uncertainty could spill over into consumer prices.
Corporate Winners and Losers
Despite the broader upbeat tone, some corporate results disappointed. French firm Schneider Electric shed nearly 8 percent in Paris after falling short of earnings expectations. London-listed BP and Associated British Foods both missed estimates, with shares sliding over three and six percent respectively. AstraZeneca also declined, losing more than three percent despite a rise in first-quarter profits.
Oil Prices Slide Amid Trade Concerns
Oil prices retreated further on Tuesday, with Brent crude down 1.7 percent to $63.66 per barrel and West Texas Intermediate falling 1.8 percent to $60.95. Fears that prolonged trade tensions may curb global demand weighed heavily on investor sentiment in the energy market.
Currency Markets Hold Mixed Signals
In the currency space, the euro weakened slightly against the dollar, trading at $1.1377. The British pound also declined, reflecting modest volatility in the wake of Canada’s election results, where Prime Minister Mark Carney’s Liberal Party secured a win. The yen edged lower, with the dollar strengthening to 142.71 yen.
