The ASX 200 is set to surge on Thursday after US President Donald Trump announced a 90-day pause on most countries, except China.
Today’s turnaround will be welcome after the ASX200 finished 135 points (-1.80%) lower yesterday at 7375. The Energy (-4.03%), Materials (-3.57%), and Health Care (-3.55%) sectors were the main drags. The Utilities (+0.22%), Consumer Discretionary (-0.35%), and Consumer Staples (-0.66%) sectors outperformed the broader market.
There was a brief rally on Tuesday, but volatility will continue for months and the ASX200 came under renewed pressure yesterday due to the 104% tariff on Chinese imports and intensifying the trade conflict between the world's two largest economies.
“Goldman Sachs' latest forecast is that the cumulative effect of China's new 104% tariff rate will see China’s GDP fall by 2.4% this year. This leaves China's GDP about half of the official “about 5%” target and increases the pressure on authorities to accelerate their plans to support their economy via stimulus measures aimed at boosting consumption and perhaps the property market,” IG Markets analyst Tony Sycamore noted.
“In recognition of the deepening tariff threat to the Chinese economy and its knock-on risks to the Australian economy, the Australian interest rate market closed yesterday pricing in 35bp of RBA rate cuts for May and a cumulative 129bp of RBA rate cuts between now and year-end - a good chunk of which will be unwound on the open today after the relief rally on Wall Street.”
US equities rebound sharply
United States equity markets surged overnight after President Donald Trump announced a 90-day delay on several planned tariffs. The move temporarily eased investor concerns, although tensions between the United States and China escalated, with tariffs on Chinese imports rising to 125%.
Despite the continued trade friction, major indices rebounded to levels seen before last Thursday’s sharp sell-off triggered by the so-called Liberation Day tariff announcement. The S&P 500 Index climbed 9.5%, marking its largest single-day gain in five years. The Dow Jones Industrial Average rose by 2,960 points, or 7.9%, recording its strongest session since 2020. The technology-heavy Nasdaq Composite outpaced its peers with a 12.1% jump — its biggest daily increase since 2001.
Technology stocks led the rally on Wall Street, with standout performances from several major names. Nvidia Corporation surged 18.7% to close at US$114.33, Tesla Incorporated jumped 22.7% to US$272.20, and Apple Incorporated rose 15.3% to US$198.85 — its strongest single-day gain since 1998.
Investor attention remains firmly fixed on developments in the tariff landscape rather than macroeconomic indicators. This shift in focus was evident following the release of the Non-Farm Payrolls data, and the trend is expected to persist with the upcoming Consumer Price Index (CPI) figures due tonight.
Markets are anticipating a moderation in core inflation, with consensus expectations for core CPI to decline to 3% year-on-year in March, down from 3.1% previously.
“President Trump's backdown is likely to have been prompted by signs yesterday of extreme dislocation in the bond market. These included soaring yields as hedge funds were likely forced out of positions due to a VAR shock/margin call and signs of distress in repo and swap spreads. While Trump appeared willing to look through equity market losses, the overnight backflip shows that the bond market remains the ultimate master of markets and politicians alike by virtue of its role as the "plumbing" of the financial system,” Sycamore wrote.
IG Markets have offered a tariff snapshot:
• Tariffs on China increased to 125% from 104%
• Tariffs on all other countries (excluding Russia, North Korea, and Belarus) will be at 10% for the next 90 days.
• Tariffs on steel and aluminium remain at 25%.
• Tariffs on imported cars are still at 25%.
• Canada and Mexico face 25% tariffs on goods not covered by the USMCA agreement.
European shares tumble as China hikes tariffs; healthcare leads losses
European markets fell sharply on Wednesday after China more than doubled tariffs on United States imports, deepening trade tensions. Healthcare stocks led the losses following a fresh threat from United States President Donald Trump to impose sweeping tariffs on pharmaceutical imports.
The healthcare sector declined 5.8%, its lowest point since October 2022, after Trump reiterated plans for a “major” tariff on all pharmaceutical products.
- The continent-wide FTSEurofirst 300 index dropped 3.6%.
- The United Kingdom's FTSE 100 index fell 2.9%.
Currencies and commodities
Currencies
Currency movements were mixed.
- The euro slipped from US$1.1095 to US$1.0916, trading near US$1.0950 at the close of United States trade.
- The Australian dollar strengthened from US59.73 cents to US61.75 cents, ending near US61.55 cents.
- The Japanese yen weakened from JPY144.03 to JPY148.20 per US dollar, before settling around JPY147.70.
Commodities
Oil prices rebounded from four-year lows after President Trump announced further tariff hikes on China but paused last week’s proposed increases for most other nations.
- Brent crude rose US$2.66 or 4.2% to US$65.48 per barrel.
- United States Nymex crude gained US$2.77 or 4.6% to US$62.35 per barrel.
Base metal prices were mixed.
- Copper futures increased 1.2% following a 90-day pause on reciprocal tariffs for dozens of non-retaliating countries. Aluminium futures fell 1.1%.
- Gold futures rose by US$89.20 or 3% to US$3,079.40 per ounce, supported by a weaker US dollar and heightened safe-haven demand. Spot gold was trading near US$3,081 at the United States close.
- Iron ore futures declined US20 cents or 0.2% to a six-month low of US$99.05 per tonne, as trade war concerns weighed on demand outlooks.
What about small caps?
The S&P/ASX Small Ordinaries (XSO) dipped 2.89% yesterday to finish at 2,751.40. Over the past five days, the index has lost 7.87%.
It has been a quiet morning so far for news flow, with companies heading to the Resource Rising Stars Gather Round Conference.
Seems everyone is getting in on the Gather Round action, which is great if you are a fan of the AFL – go Saints!.
You can read about the following and more throughout the day.
- Imugene Ltd will host a shareholder webinar at 11:00am AEST on Wednesday, April 16, 2025, to provide an update on corporate developments and address frequently asked questions from shareholders. The session will be presented by Executive Chairman Paul Hopper, who will be joined by Chief Executive Officer and Managing Director Leslie Chong, as well as Chief Operating Officer Bradley Glover.
- Orthocell Ltd continues its commercial expansion in Asia, having submitted a regulatory application for its Remplir™ nerve repair product to the Hong Kong Department of Health’s Medical Device Division. Subject to approval, sales are expected to begin in the fourth quarter of calendar year 2025.
- Recce Pharmaceuticals Ltd has announced a capital raising of up to approximately A$15.8 million. The raise includes a A$5 million commitment from an Australian-based private investor, alongside a A$10.8 million entitlement offer at the same price per share as the placement. Funds will support Phase III topical clinical trials in Indonesia and Australia, with potential commercial outcomes anticipated in 2026. Company directors have expressed their intention to partially or fully take up entitlements.
- Tryptamine Therapeutics Ltd has entered a Clinical Trial Research Agreement with Swinburne University to commence an open-label trial of its intravenous psilocin-based formulation TRP-8803. The study will assess its safety and efficacy in combination with psychotherapy for adults with Binge Eating Disorder.