Expect significant new tariffs on Chinese imports and moderate levies on goods from other nations , as President-elect Donald Trump rolls out his protectionist agenda. However, with his preference for chaotic policymaking and sudden shifts , there’s uncertainty on how soon these import taxes will actually hit. Dubbed “ Tariff Man ,” Trump aims to use tariffs both strategically and tactically . He’s mentioned taxing all Chinese goods up to 60% and potentially setting 10%-20% tariffs on imports globally , but details on these plans remain vague . Key players within Trump’s team are divided: Robert Lighthizer , a staunch tariff advocate, sees permanent duties as crucial to balance US trade , while others, like billionaires John Paulson and Scott Bessent , view tariffs as temporary leverage. Trump’s previous administration had mixed feelings, especially on national security-related trade limits , which he sometimes dismissed, favoring an “open for business” approach. High-profile busin
US Treasury yields and the dollar dipped, while the Dow Jones Industrial Average surged to a record high on Friday, as a mild US inflation report boosted expectations for a larger interest rate cut at the Federal Reserve's (Fed) November meeting.
The personal consumption expenditures (PCE) price index, the Fed's preferred measure of inflation, rose just 0.1% in August, down from 0.2% in July, indicating that inflation is moderating. Over the past 12 months, the PCE increased 2.2%, down from 2.5% in July, lifting market sentiment. This fueled expectations for a 50-basis-point interest rate cut at the Fed's upcoming policy meeting, with the probability of such a cut rising to 56.7% from 49.9% prior to the data release, according to the CME's FedWatch Tool.
The Dow Jones Industrial Average rose 137.89 points (0.33%) to close at 42,313.00, setting a new record, while the S&P 500 dipped 0.13% and the Nasdaq Composite fell 0.39%. Despite the slight declines in the S&P 500 and Nasdaq, all three major US indices posted their third consecutive week of gains.
Global stocks also rallied, with MSCI’s global stock index hitting an intraday record, and European shares closed at an all-time high, bolstered by China’s stimulus measures aimed at boosting its domestic economy. Chinese stocks saw significant gains, with blue-chip stocks jumping 4.5%, and Hong Kong's Hang Seng Index rising 13% for the week, marking its best performance since 1998.
The 10-year US Treasury yield fell 3.5 basis points to 3.754% as demand for safer assets increased amid geopolitical tensions in the Middle East, with Israel’s recent actions in Lebanon pushing investors towards Treasury bonds.
In currency markets, the dollar weakened against the yen, falling 1.82% to 142.17, after Shigeru Ishiba, Japan's former defense minister, appeared poised to become the next prime minister. The dollar index, which tracks the greenback against a basket of currencies, was down 0.17%, hitting its lowest level since July 2023.
In commodity markets, aluminum prices reached a 16-week high following China’s latest stimulus efforts, and oil prices edged up slightly, with US crude settling at US$68.18 per barrel and Brent crude at US$71.98 per barrel. Gold prices, although down 1% on the day, were on track for their best quarter in over eight years.
This market rally reflects optimism around a more aggressive Fed rate cut, coupled with China's economic stimulus, which has lifted both global stock markets and commodity prices.
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