Stock Selloff Eases as Trump Comments Lift Mood: Markets Wrap

(Bloomberg) — Stocks edged up in Asia along with futures for European and US markets after President Donald Trump sought to reassure a business roundtable over the outlook for the economy and the steps he’s taking to boost growth.

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A gauge of regional shares traded in a tight range while Australia’s benchmark S&P/ASX 200 index hovered near a correction as Trump’s tariffs on steel and aluminum took effect with no exemptions. Treasuries rose and the dollar strengthened against all its Group-of-10 peers ahead of a consumer inflation reading later Wednesday.

Futures for the S&P 500 and the Nasdaq 100 gained after Trump said he doesn’t see a US recession, downplaying Wall Street’s jitters around his trade war. Contracts for Europe jumped as much as 1% after Ukraine accepted a US proposal for a 30-day truce with Russia.

Trump’s tariff policy, geopolitical realignments over Ukraine, sticky inflation and the unknown pace of Federal Reserve interest-rate cuts have hit the markets this year, leaving US stocks on the verge of a correction. The VIX gauge of stock volatility is hovering near its highest since August, while a similar measure for Treasuries is at levels not seen since November as market participants remain nervous about US economic growth.

“Any relief from all that geopolitical noise is a good thing for markets right now,” said Ken Wong, an Asian equity portfolio specialist at Eastspring Investments. News regarding a ceasefire in Ukraine and relief in the tariff tensions between the US and Canada are helping, he said. “Things are quite different just eight hours ago.”

Trump told top executives gathered at a meeting of the Business Roundtable that he’s putting a priority on speedy approvals, particularly regarding environmental regulations, and planned to soon announce a major electricity project, according to a person familiar with the session. He also reiterated a suggestion that a company’s business taxes could be reduced if it manufactured its products in the US.

Goldman Sachs Group Inc. strategists slashed their target for the US equity benchmark amid mounting concerns over growth of the world’s largest economy and declines in the “Magnificent 7” stocks.

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Trump tried to damp concerns of a recession in the US economy.

“I don’t see it at all. I think this country’s going to boom,” he said at the White House. He added that markets “are going to go up and they’re going to go down. But you know what, we have to rebuild our country.”

In geopolitics, less than two weeks after Trump lambasted Ukrainian President Volodymyr Zelenskiy in an Oval Office confrontation, the US president put the pressure on Russia to accept a ceasefire agreement hammered out with Zelenskiy’s advisers.

The accord reached in Saudi Arabia by US and Ukrainian negotiators for a 30-day halt in the conflict, which began with Russia’s full-scale invasion three years ago, now hinges on Russian President Vladimir Putin.

Trump’s latest tariffs on steel and aluminum imports came into force Wednesday, extending his trade wars to more of the US’s top trading partners in a risky bid to revive an industrial base that migrated over decades to foreign competitors. The president announced his plan last month to impose 25% duties on the metals.

The European Union launched countermeasures to the new US tariffs on steel and aluminum with plans to impose duties on American goods worth €26 billion ($28.3 billion). The European Commission, the EU’s executive arm, said in a statement that it would move forward with “swift and proportionate” measures.

In Asian corporate news, Hong Kong’s carrier Cathay Pacific Airways Ltd. reported profit that beat estimates. The airline warned of an uncertain outlook for its cargo unit due to global trade conflicts.

On the US consumer inflation reading later Wednesday, economists forecast it stayed elevated last month after a large increase in January, adding to evidence that progress on taming prices has stalled. The consumer price index is seen advancing 0.3% in February after a 0.5% gain at the start of the year.

Markets “will be wary of further signs of sticky prices,” said Kyle Rodda, a senior analyst at Capital.com in Melbourne. “Further evidence of inflation stuck at current levels will raise concerns that the Fed will lack the wiggle room to cut rates if Trump’s economic policies cause a precipitous slowdown in economic growth.”

In commodities, oil extended a gain as the US cut its forecast for a global oversupply. Gold held its advance, supported by haven demand.

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