Investors Navigate Economic Uncertainty Amid U.S.-China Trade Truce

Global stock markets and the dollar experienced mixed reactions on Tuesday, following an initial surge sparked by a 90-day trade truce between the United States and China. The agreement raised hopes of reduced tensions between the two largest economies, yet concerns over broader economic impacts lingered.

After a 3.3% rally on Wall Street on Monday, enthusiasm dwindled slightly, with European stocks posting a modest 0.2% increase. This was buoyed by positive corporate earnings from companies like Bayer and Vestas, which saw substantial gains. However, futures on the S&P 500 and Nasdaq fell fractionally, reflecting caution around U.S. assets.

As part of the truce, both countries agreed to lower tariffs on imports, which had been previously escalated. While these changes contributed to a subdued market reaction, investors remain wary of ongoing economic uncertainties. Market analysts highlighted that despite the truce, the overall tariff environment remains considerably elevated.

(With inputs from agencies.)