Nick Goold
Last week was relatively quiet for global markets as investors awaited the outcome of U.S.–China tariff negotiations. The highlight was the announcement of a U.S.–UK trade agreement on Thursday, which lifted investor confidence and raised hopes for progress with other countries. U.S. equities ended the week mostly flat, while Japan’s main stock index rose more than 3.5%, supported by a weaker yen that boosted exporter sentiment.
The US dollar strengthened, with the Dollar Index moving back above 100 after the Federal Reserve held rates steady and signaled a “wait and see” approach due to tariff uncertainty and mixed data. The ISM Services Index slightly beat forecasts at 51.3, showing modest growth, while the trade deficit widened to $140.5 billion on strong imports and front-loading ahead of potential new tariffs.
The Bank of England cut its key interest rate by 0.25% to 4.25%, citing global economic uncertainty and the impact of tariffs. Bitcoin surged past $100,000 as investor appetite for risk continued to grow, while gold also gained, supported by strong demand from China. Markets received another boost on Monday after a joint statement was released following weekend trade talks in Geneva. The U.S. and China announced that by May 14, they will significantly reduce tariffs—lowering U.S. duties on Chinese goods from 145% to 30%, and China’s levies on U.S. imports from 125% to 10%. Treasury Secretary Scott Bessent said the two sides had made “substantial progress” and agreed to a 90-day pause in trade tensions. China’s Vice Premier He Lifeng called the meeting a “positive step,” despite ongoing differences.
Markets This Week
U.S. Stocks
U.S. stocks held their recent gains last week and got a boost on Thursday after the U.S.–UK trade deal was announced. Over the weekend, markets reacted positively to signs of progress in U.S.–China trade talks, which are key for further gains. Following Monday’s U.S.–China tariff freeze, the market rose significantly, erasing its yearly losses. Optimism remains as President Trump appears more willing to negotiate and support rising markets. In the short term, the market looks overbought, but further gains are likely as the worst-case outcome of a trade war with China now seems increasingly unlikely. The outlook remains positive, but traders should stay cautious — progress in trade talks continues to be critical. Focus on buying opportunities, but be ready to exit quickly if the mood shifts. For the Dow Jones, support is at $41,000, $40,500, and $40,000, with resistance at $42,500 and $42,800.
Japanese Stocks
The Nikkei 225 posted another week of gains, finding support at the 10-day moving average after starting the week in overbought territory. The index surged higher following the U.S.–China tariff freeze, which boosted global risk sentiment and shifted focus toward ongoing U.S.–Japan trade negotiations. Improving sentiment continues to lift USD/JPY, which in turn supports Japanese equities. The market is still pricing in a positive outcome from trade discussions with the U.S., helping maintain the current uptrend. This week, buying on dips looks like the best approach, but a break below the 10-day moving average could lead to further losses. Support is at 37,000円, 36,500円, and 36,000円, while resistance is at 39,000円 and 40,000円.
USD/JPY
USD/JPY had another volatile week, dropping to support at 142.00 after hitting resistance at 146.00, but rebounded strongly as risk sentiment improved following the U.S.–UK trade deal and encouraging U.S.–China trade talks. The pair returned to recent highs by the weekend, and surged above 146 on Monday following the positive U.S.–China trade news. The 10-day moving average is now pointing higher, reflecting building momentum. With trade negotiations progressing and technical strength improving, buying on dips looks like the best strategy this week. Support is at 144.00, 143.00, and 142.00, while resistance is at 148.00 and 150.00.
Gold
Gold moved higher early last week on continued Chinese buying but struggled to hold gains as improving risk sentiment reduced demand for safe-haven assets. In the current environment, upside appears limited, and selling into strength remains the preferred strategy this week. Resistance is at $3,350, $3,400, and $3,440, while support is at $3,200, $3,170, and $3,100.
Crude Oil
Crude oil opened last week under pressure but held support at $55 and rebounded strongly on hopes that a U.S.–China trade deal would boost demand. The U.S.–China news on Monday was positive, giving the market an extra lift, but resistance remains firm at $62.50. While the recovery has been solid, the $62.50–$65 range may be tough to break in the short term. This week, focus on selling opportunities near resistance.
Bitcoin
Bitcoin surged above $100,000 last week as progress in global trade negotiations boosted investor confidence. After the strong rally, the market appears slightly overbought, so some sideways movement is likely in the short term. This may create range trading opportunities for short-term traders, while medium- to long-term investors should remain patient and look to buy on weakness. Support is at $100,000, $95,000, $92,500, and $90,000, with resistance at $105,000 and $110,000.
This Week’s Focus
Tuesday: U.S. CPI
Thursday: U.K. GDP, U.S. Retail Sales, U.S. PPI
It’s a busy week for economic data, with U.S. inflation in focus as traders assess whether the Federal Reserve could begin cutting interest rates in the coming months. U.S. retail sales will also be closely watched to see if tariff uncertainty is affecting consumer spending. Following Monday’s encouraging U.S.–China tariff pause announcement, the market will look for further details. Progress with talks involving other countries, such as Japan, will also be important to monitor.
Deals Drive Markets: How to Trade the Negotiation Game
President Trump has sealed a U.S.–UK trade deal — a major political win that shows the U.S. is willing to strike agreements, but only on its own terms. The deal has boosted confidence that the U.S. may be open to easing trade tensions, but many challenges remain. The most important negotiation is still with China, though several other countries are now rushing to engage with the U.S. as well.
Over the weekend, U.S. and Chinese officials held high-stakes talks in Geneva — their first meeting since Trump imposed a 145% tariff on Chinese goods. China had responded with a 125% tariff on U.S. imports, heightening fears of a global slowdown. But on Monday, a joint statement confirmed that both sides had made “substantial progress.” By May 14, the U.S. will lower tariffs on Chinese goods to 30%, and China will reduce its duties on U.S. imports to 10%. Treasury Secretary Scott Bessent also announced a 90-day pause in trade tensions. Markets rallied immediately on the news, with equities, commodities, and risk currencies all surging.
Since the first tariffs were introduced, global markets have become highly sensitive to trade headlines. Every new deal or dispute now moves not just individual economies but the entire world financial system. As more countries line up to negotiate with the U.S., the outcomes could shape markets for years to come.
Who’s Next on Trump’s Trade List?
With momentum building after deals with the UK and progress with China, other nations are racing to engage with Washington. Over 50 countries have shown interest, but only a handful have formally entered talks.
- China: After “substantial progress” in Geneva talks, a joint statement was released Monday confirming tariff cuts. By May 14, the U.S. will lower tariffs on Chinese goods from 145% to 30%, while China will cut tariffs on U.S. imports from 125% to 10%. Both sides also agreed to a 90-day pause in trade tensions.
- Japan: PM Ishiba is working to avoid auto tariffs; Japan’s U.S. debt holdings may become a bargaining chip.
- South Korea: Talks may continue at APEC, but a deal is unlikely before the June 3 elections.
- India: Offering to cut tariffs on over half of U.S. imports. A deal is a top priority but new tariffs are possible over oil ties to Venezuela.
- Vietnam: In talks since March; faces a 46% tariff. On May 7, its top negotiator urged local firms to boost trade with the U.S.
- Canada: Trump and PM Carney plan to restart talks. Current tariffs remain on energy and non-USMCA goods, with Canadian retaliation in place.
- Mexico: Sending its economic minister to review parts of the USMCA, especially autos and agriculture.
- Australia: Pushing for fast-track talks using minerals, energy, and defense cooperation.
- European Union: Talks have begun, but the EU warns of countermeasures. Italy’s PM visited D.C., and Elon Musk supports a U.S.–EU free trade zone.
Each of these countries brings a different strategy — some are looking to protect key industries, while others are trying to expand exports. For traders, these ongoing negotiations create a steady stream of headlines, market shifts, and opportunities.
How to Trade Negotiation News: Expectations Matter
In trading, it’s not just the news itself that drives markets — it’s how that news compares to what traders were expecting. A “good” trade deal might already be priced in. If the outcome is less impressive than the market hoped, prices can still fall. On the other hand, a surprise breakthrough — even a small one — can spark a major rally if expectations were low.
1. Track Sentiment, Not Just News
Ask yourself: Is the market already expecting good news? If prices have been rising all week in anticipation, there may be limited room for upside when the news actually breaks. Disappointment risk grows as expectations rise.
2. Watch for Overextensions
When a market moves too far, too fast, it becomes vulnerable. This is especially true around key news events like trade deals. Even a positive headline may trigger a reversal if traders rush to take profits.
3. Use Technical Levels
Use simple tools like trendlines, moving averages, and key support and resistance levels:
- Support = likely bounce zones where buying may appear
- Resistance = likely ceilings where selling pressure builds
Watch how price reacts at these levels during major news. If the market stops at a key level, a reversal could follow. If it breaks through, the move may continue strongly.
4. Be Flexible and Stay Nimble
Markets can change direction quickly, especially during geopolitical news. Be willing to adapt if new information changes the picture.
5. Trade the Second Move
The first reaction to news is often emotional and volatile. The second move tends to be more measured — and more tradeable.
Trump’s trade deal with the UK was just the beginning. The U.S.–China tariff freeze that followed triggered a major market move, creating big opportunities for traders. With more countries now entering talks, global trade dynamics are shifting rapidly. For traders, that means fresh chances — and real risks. The edge comes from staying informed, watching how markets react to news (not just the news itself), and managing trades with discipline. Focus on expectations, not headlines — that’s how you stay ahead.
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