Stocks Fluctuate Following Mixed US-China Trade Optimism – Europe Market Wrap

US stock futures fluctuated after back-to-back gains on Wall Street as investors scaled back their expectations of quick progress in the US-China trade dispute.

S&P 500 contracts were steady after sliding earlier as China maintained a defiant stance over tariffs imposed by the Trump administration. Stocks in Europe pared a decline. The dollar weakened as unpredictable White House policy moves boosted demand for the Swiss franc, the yen and gold as relative havens. Treasuries advanced.

On the earnings front, International Business Machines shares slumped 8% in US premarket trading after its results fell short of high market expectations. European traders were tackling a deluge of earnings, with Unilever Pic rising after its sales beat estimates. BNP Paribas slid as its profit declined.

Stocks are struggling to extend Wednesday’s global rally, which was spurred by signs President Donald Trump is rethinking the most aggressive elements of his stances on trade and the Federal Reserve. The market moves underscore how investors are grappling to keep up with pronouncements from officials in the administration and frequent back-and-forth by Trump on his tariffs.

Meanwhile, Deutsche Bank strategists slashed their year-end S&P 500 target by 12%, citing the blow to US companies from tariffs. While the new target of 6,150 points leaves 14% upside from Wednesday’s close, it means the index will only recover losses sustained since its February peak. Up until this change, the Deutsche Bank team had one of the most bullish views for the benchmark.

Trump signaled Wednesday that the US is going to have a fair deal with China, adding that the country may receive a new tariff rate in the next two to three weeks. Bessent tempered some of the optimism over that development, as he said the US was not looking to unilaterally lower tariffs and that a full trade deal could take two to three years.