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Morning Research Notes - 11.04.25
Yesterday, US stocks experienced a downturn as escalating U.S.-China trade tensions, marked by the White House's confirmation of 145% tariffs on China, fuelled investor concerns.
Commodities performed well on Thursday. Gold increased by 2.9% to $US3173.48 an ounce, iron ore rose by 2.6% to $US97.25 a tonne, contrastingly, Brent Crude (Oil) decreased by 3% to $US63.52 a barrel.
Wall Street closed sharply lower on Thursday, driven by escalating concerns over the US - China trade war, after the White House confirmed tariffs on Chinese imports had risen to 145%. This announcement followed President Trump's earlier statement about reciprocal levies, leading to a significant drop in major indices: the Dow Jones fell 1015 points (2.5%), the S&P 500 dropped 3.5%, and the Nasdaq declined 4.3%. The market's negative sentiment was further compounded by weaker-than-expected CPI data (2.4% vs exp. 2.5% y/y), which may indicate a slowdown in economic activity. Tech stocks, including Tesla, Apple, and Nvidia, also suffered further losses due to fears that tariff uncertainties could hinder cloud and AI investment.
On Thursday, the Australian market rebounded sharply, with the ASX200 index rising by 4.34%. Major sectors, including Materials, Financials, Information Technology, Healthcare, and Utilities all ended the day in the green, closing higher by 6.32%, 4.37%, 7.57%, 3.58%, and 3.65%, respectively. Major commodities also had a bearish day, with aluminium, copper, zinc, and nickel all ending the day with losses.
Chart of the day
Following President Trump's announcement of a pause on tariffs exceeding 10% for most countries, the market responded positively. This came despite the imposition of a 125% tariff on Chinese imports, which may adversely affect tech firms like Apple. Major trading partners such as Canada, Mexico, and the EU continue to face elevated tariffs, yet market sentiment remained buoyant on the day of announcement. Goldman Sachs analysts have reduced the probability of a recession, though risk persists as global negotiations with Trump must conclude within 90 days to avoid the reimplementation of these levies.
Source: ChartOfTheDay
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