Global stock markets ended the week mixed, as investors looked forward to a meeting between the US and China, hoping that the world's two largest economies can reach a compromise on their trade war.
Officials from Washington and Beijing are scheduled to meet in Geneva on Saturday for the first in-person, high-level contact since US President Donald Trump started a tariff war on April 2 that has upset markets, businesses and consumers.
At the centre of the talks will be US Treasury Secretary Scott Bessent, Trade Representative Jamieson Greer and Chinese Vice Premier He Lifeng, who is Beijing's leading figure on the economy.
While positive outcomes may mark a turning point not only between the two political rivals but also for the global economy, the results of the talks are hard to judge.
Mr Trump on Thursday said he believes the meeting will be “substantive”, then on Friday floated the idea of cutting US tariffs on imported Chinese goods to 80 per cent – a level that he said “seems right” and down from levies as high as 145 per cent that America had imposed.
His suggestion appears to be a willingness to repair the rift. The tariffs have sparked protests from US consumers, warnings from the business sector, raised the spectre of a global recession and dragged America's gross domestic product 0.3 per cent lower in the first quarter of 2025 – the first contraction in three years.
China, meanwhile, responded in kind, retaliating with tariffs that are as high as 125 per cent. Mr He had previously said that the economy was off to a “strong start” in 2025, although Beijing still needs to contend with an unstable housing market and tepid consumer spending.
Given the circumstances, a US-China deal may not be forged soon, and the meeting might be used to de-escalate tensions between the two countries, said Ipek Ozkardeskaya, a senior analyst at Swissquote Bank, who pegs the talks at “a 60-40 chance for good versus bad vibes”.
“The goal isn’t to seal a trade deal – that will probably take months, if not years … and who knows – maybe they’ll agree to pause tariffs while discussions continue. Impossible to tell,” she said.
“In the best-case scenario, talks go well, both countries commit to finding a reasonable deal, markets rally on Monday, the US dollar continues rebounding, and gold retreats further. Or, the talks break down, Mr Trump says something he shouldn’t, and we wake up to another hectic week – with a global sell-off in equities and the dollar, and a rebound in gold.”
On Wall Street, the S&P 500 inched down 0.1 per cent, the Dow Jones Industrial Average shed 0.3 per cent and the tech-heavy Nasdaq Composite nudged up 0.1 per cent.
For the week, the S&P declined 0.5 per cent, the Dow retreated 0.2 per cent and the Nasdaq gave up 0.3 per cent. Year-to-date, the indices are down 3.8 per cent, 3 per cent and 7.2 per cent, respectively.
In Europe, London's FTSE 100 settled 0.3 per cent higher, as investors kept close tabs on trade developments – most notably on the Thursday deal where Mr Trump and British Prime Minister Keir Starmer unveiled an agreement between the two countries, most notably benefiting the car and steel sectors.
“The macroeconomic uplift from this deal will be modest. But sector-specific clarity matters – particularly for capital-intensive industries,” said Lale Akoner, a global markets analyst at broker eToro.
On Tuesday, the UK also scored a “landmark deal” with India that cut tariffs on UK exports.
Frankfurt's DAX added 0.6 per cent after the index hit a new all-time high, while Paris' CAC 40 climbed 0.6 per cent.
Earlier, in Asia, most major stock markets were also buoyed by the US-China talks. Japan's Nikkei 225 settled 1.6 higher, also lifted by optimism from Japan's own discussions with the US.
Hong Kong's Hang Seng index added 0.4 per cent, while the Shanghai Composite: retreated 0.3 per cent.
In commodities, oil prices jumped on Friday to settle higher and post their first weekly gain in three as the US and China prepared for their talks.
Brent closed 1.7 per cent higher at $63.91 a barrel, while West Texas Intermediate leapt 1.85 per cent to at $61.02 a barrel.
Gold, meanwhile, ended the week higher as the dollar retreated amid anticipation of the trade talks.
The precious metal, considered a safe haven asset, added 0.67 per cent to $3,326.15 an ounce. Gold has surpassed several key levels in recent months and has now surged by more than 26 per cent in 2025.
