8 hours ago
36
Early sun rising over the Taj Mahal, India
Julieannebirch | E+ | Getty Images
Asia-Pacific markets are poised to mostly climb Tuesday, following a massive rally on Wall Street after the U.S. and China announced a trade deal, including a 90-day pause on tariffs and a drop in reciprocal tariffs by 115 percentage points.
Australia's S&P/ASX 200 is set to rise at the open, with futures tied to the benchmark at 8,364, compared to its Monday close of 8,233.50.
Japan's benchmark Nikkei 225 was set to open higher, with the futures contract in Chicago at 38,745 while its counterpart in Osaka last traded at 38,730, against the index's last close of 37,644.26
Futures for Hong Kong's Hang Seng index stood at 23,403, pointing to a weaker open compared to the HSI's last close of 23,549.46.
U.S. stock futures were flat after all three key benchmarks hit their best day since April 9, as investors awaited the release of an inflation report.
Overnight stateside, stocks soared as investors' fears of a recession in the U.S., sparked by a trade war with China, were abated after the two superpowers arrived at a deal.
The Dow Jones Industrial Average surged 1,160.72 points, or 2.81%, and closed at 42,410.10. The 30-stock index ended the session near its highs of the day, with buying enthusiasm remaining strong.
Meanwhile, the broad-based S&P 500 popped 3.26% to end at 5,844.19, giving it gains of over 20% since its April intraday low at the height of tariff pessimism. The benchmark's year-to-date losses have now narrowed to just 0.6%.
The Nasdaq Composite added 4.35% and settled at 18,708.34, as the details of the trade deal sent technology stocks with exposure to China — like Tesla and Apple — higher.
— CNBC's Brian Evans, Yun Li and Fred Imbert contributed to this report.
Goldman cuts recession risk to 35% from 45% after Chinese tariff pause
Economists Goldman Sachs cut their estimated risk of a recession in the U.S. to 35% from 45% after President Donald Trump's temporary pause on Chinese tariffs.
"In light of the somewhat smaller hit to GDP growth, the reduced risk of US-China tariffs high enough to cause production disruptions, and the encouraging signal about future tariff policy decisions, we are lowering our 12-month recession probability to 35% (vs. 45% previously)," the firm wrote in a note to clients.
Goldman said the Trump administration is likely to announce other preliminary trade deals over the next few weeks, which might lower the US effective tariff rate slightly further.
— Yun Li, Michael Bloom
Wall Street’s fear gauge falls back to pre-'Liberation Day' levels
The CBOE Volatility Index, also known at the Wall Street fear gauge, is back below 20 for the first time since March after the U.S. and China reached a deal to temporarily pause most of their tariffs on each other's goods.
The VIX was last near the 19 level on Monday after declining in the last few sessions. The last time the index was under the 20 level was on March 27, when it closed at 18.69, before Trump announced sweeping tariff announcements in early April.
The VIX had reached as high as 60.13 on April 7 as volatility soared on escalating tariff and trade tensions.
The VIX measures the move in call and put options and is considered the market's estimate of expected volatility in the S&P 500 stock index.
— Pia Singh
English (US)