Persisting doubt: American stock exchanges Registering a downturn in economy

Rising Oil and Gold Prices Amid Trade Uncertainty: US Stocks Pause

Persisting doubt: American stock exchanges Registering a downturn in economy

Investors' eyes are now set on China, as the US made a trade deal with the UK. Confidence in a swift agreement appears slim. The Wall Street showed minor losses to close.

Before the weekend's US-China talks to ease the trade fuss, the Wall Street remained unfazed. The Dow Jones Industrial Average of blue-chip stocks dipped 0.3% to rest at 41,249 points. The broader S&P 500 slid 0.1% to 5,651 points, while the Nasdaq tech exchange stayed steady at 17,928 points.

Representatives from the world's two most influential economies will convene in Switzerland over the weekend to discuss tariffs. Investors are hoping these talks may put an end to the trade war causing worries about global growth. US President Donald Trump proposed lower tariffs on Chinese imports on Friday, yet analysts remain doubtful. "Trading 140 percent or 80 percent tariffs doesn't make much difference," said Michael Matousek, senior trader at US Global Investors, "as long as there are still 80 percent tariffs, people won't buy goods."

Yesterday, the US and UK finalized a trade deal - the first of its kind since Trump enforced his initial tariffs last month. However, many details are still pending, and a base tariff for imports into the US remains in place.

Safe Haven in Demand

The gold price rise reflects the continuous strain on the markets. "Undeniably, the persistent uncertainty surrounding tariffs remains the most significant factor for gold prices," said David Meger, head of metals trading at High Ridge Futures. The troy ounce of the precious metal appreciated 0.7% to $3,327. On the oil market, the North Sea Brent and US WTI crude each escalated by around 1.7% to $63.88 and $60.99 per barrel (159 liters), respectively.

"If both parties set a date for formal trade talks and agree to gradually decrease high tariffs during negotiations, the oil price could increase by another two to three dollars per barrel," said Vandana Hari, founder of Vanda Insights.

Disappointing quarterly results hammered Expedia. The online travel platform's shares plunged 7.3%. The company's first-quarter revenue of $2.98 billion slipped just below the average of analysts' estimates. Meanwhile, Lyft's business report resonated with investors. The ride-hailing company's shares skyrocketed by 28%. Lyft reported an adjusted earnings per share of 24 cents in the first quarter, surpassing analysts' expectations of 19 cents. The company also plans to repurchase more shares. Trade Desk's shares rocketed up by 18.6% after the advertising company reported first-quarter revenue and earnings above Wall Street estimates.

Check out today's market news for more details.

Sources: ntv.de, ino/rts

• Stock Prices
• Stock Trading
• Dow Jones
• Wall Street

Enrichment Data:

Overall:

Impact of US-China Trade Talks on Stock Markets and Gold Prices

Stock Markets:

• Positive Impact: Trade talks between the US and China typically bolster market confidence, resulting in a rise in stock prices. Within the past weeks, stocks, especially those within the S&P 500, have experienced robust growth due to escalating optimism over potential trade agreements[2]. This positive sentiment has driven up stock prices, with approximately three-quarters of the S&P 500 stocks increasing during a recent session[2].
• Risk Reduction: Dialogues aimed at reducing incapacitating tensions may result in diminished recession risks and eased inflationary pressures, further supporting stock market gains by minimizing economic uncertainty[2].

Gold Prices:

• Safe-Haven Asset: Gold often serves as a safe-haven asset, and its price typically rises during economic uncertainties or disputes, including trade tensions.
• Inverse Relationship with Stocks: When stocks rise due to optimistic trade news, gold prices might decline as investors shift their focus from safe-haven assets to equity markets.

Trade Talks and Economic Uncertainty:

• The outcome of US-China trade talks could affect gold prices oppositely to stock market movements. If talks lead to a de-escalation of tensions, gold prices might decrease as investors become less risk-averse.
• Inverse to this, if talks fail to improve trade relations or if tensions intensify, investors might seek safety in gold, potentially causing its price to surge.

In summary, successful US-China trade talks could lead to increased optimism in stock markets, potentially driving prices up, while reducing the appeal of safe-haven assets, like gold. Conversely, failure to resolve tensions could cause gold prices to soar as investors seek safety.

References:

[1]: US wobbles ahead of China trade talks in Geneva[2]: Can Upcoming US-China Trade Talks Fuel This 'Unloved Rally'?Note: The search results do not specifically address gold prices in relation to US-China trade talks; thus, general principles about trade impacts and market behavior are applied.

1. Despite the US making a trade deal with the UK, investors' attention is now on China, as they remain skeptical about a swift agreement between the two economic powerhouses.
2. The rise in gold prices and oil markets reflects the continuous uncertainty surrounding tariffs, making gold a sought-after safe-haven asset.
3. As the US and China engage in trade talks, the potential agreement could boost stock markets, especially within the S&P 500, due to escalating optimism over potential trade agreements.
4. However, if talks fail to improve trade relations or tensions intensify, gold prices might surge as investors seek safety, potentially decreasing the momentum in stock markets.

Read also: