US Stocks Rise On Tariff Negotiation Optimism – Europe Market Wrap

Stock futures signaled a rebound on Wall Street as positive signals from initial US-Japan trade talks stirred optimism agreements can be reached to avoid higher levies on American trading partners.

S&P 500 contracts climbed 0.6%, indicating a partial bounce back after Wednesday’s 2.2% slide. Nasdaq 100 futures rose 0.9%, with sentiment buoyed by an upbeat sales forecast from Taiwan Semiconductor Manufacturing, the world’s biggest chipmaker. Europe’s Stoxx 600 index fell before the European Central Bank’s interest rates decision on a busy day of corporate earnings.

President Donald Trump said there was “big progress” in talks to strike a deal for Japan. The yen weakened after the country’s chief trade negotiator said currencies weren’t discussed, allaying concerns the US would push for a stronger exchange rate. Treasury yields climbed after Federal Reserve Chair Jerome Powell reiterated his commitment to keeping inflation in check. A gauge of the dollar climbed.

Following the turmoil triggered by the announcement of broad US levies earlier this month, investors are focusing more on developments in country-specific trade negotiations. Key questions surround China, after Beijing indicated Wednesday it has several conditions for agreeing to talks with the Trump administration.

The ECB is expected to cut rates for the seventh time later Thursday, after Trump’s tariffs darkened the economic outlook. With trade negotiations still in flux. President Christine Lagarde is unlikely offer clear indications on where rates will go next.

Meanwhile, Powell on Wednesday signaled a wait-and-see approach to tariffs, pushing back on hopes the central bank would act quickly to soothe investor fears. His comments, along with concerns over the impact of tariffs on the tech sector, helped end a two-day consolidation in stocks.