Market participants across U.S. exchanges appear to be largely dissatisfied following former President Trump’s trip to China. On Friday, major stock indices dropped sharply, reflecting persistent and significant market uncertainty. The Dow fell by 1.1% to 49,526 points, the Nasdaq-100 dropped 1.5% to 29,125 points, and the broader-based S&P 500 declined 1.2% to 7,409 points.
Although Trump received a warm reception in Beijing, key disagreements remain unresolved. Specifically, there was reportedly no discussion regarding reciprocal tariffs. Instead, the sensitive issue of Taiwan was reignited, with China reiterating its claims over the island and Trump questioning the planned sale of military hardware. Fundamentally, market observers note that a conflict over Taiwan would be the absolute last thing semiconductor-dependent markets require.
Further diminishing confidence in international stability, the oil market saw sharp gains. If one questions whether Trump made progress toward opening the Strait of Hormuz, the oil price metrics offer a clear view. On Friday evening, a barrel of North Sea Brent crude oil cost $109.50, representing a 3.6% increase from the previous day’s close.
Compounding the instability, the specter of rising interest rates is once again haunting the stock markets, especially given the already clear inflation surge. Markets fear that the U.S. central bank will be forced to raise rates in response to continued inflation, a development widely considered damaging to equities.
Meanwhile, the gold price reversed sharply. By the end of the day, half an ounce of gold cost $4,542, marking a 2.3% decline, which equates to €125.62 per gram. In currency markets, the Euro weakened considerably: one Euro cost $1.1624, meaning the dollar fetched €0.8603.
