Asia Set for Bumpy Open on Hints of Tariff Relief: Markets Wrap

(Bloomberg) — US stock futures pointed to gains on Wall Street amid hopes President Donald Trump’s administration might walk back some of its tariffs. European equities surged and bunds tumbled on Germany’s spending plans.

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Contracts on the S&P 500 index rose 0.4% and Nasdaq 100 futures gained 0.5% as shares of automakers, banks and chip firms jumped in premarket trading after US Commerce Secretary Howard Lutnick hinted at tariff relief for Mexico and Canada. Goldman Sachs Group Inc. and Citigroup Inc. rose more than 1%, while Tesla Inc. was poised to recover from a four-month low.

US equities capped their worst two-day slump since December on Tuesday, before the comments from Lutnick, who told Fox Business that Trump may offer a path to alleviate some tariff pressure. Traders will be watching data due later today for a snapshot of the state of the economy.

“The market doesn’t like uncertainty and tariffs will most likely continue to be an overhang risk,” Nataliia Lipikhina, EMEA equity strategy head at JPMorgan Private Bank, said on Bloomberg TV. “But if we are looking at earnings growth in the US, we actually see double-digit growth in 2025 and 2026. We are buyers of the dip at this point.”

In an address to Congress, Trump acknowledged that there may be an “adjustment period” to tariffs as he defended his policies to remake the US economy. Ten-year Treasury yields traded steady at 4.24%, while the dollar sank 0.4%.

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In Europe, the Stoxx 600 benchmark jumped 1.6% and bonds tumbled after chancellor-in-waiting Friedrich Merz outlined a sweeping fiscal overhaul that could boost the European economy. A sale of new 30-year bunds attracted solid demand.

Speculation that more spending will fan inflation — requiring tighter policy from the European Central Bank — lifted the euro toward its best three-day run since November 2022 and sent 10-year bond yields at least 10 basis points higher in the UK, France, Italy and Spain.

“Huge quantities of debt in the coming years is going to be quite disruptive for European bond markets, particularly the long end of the curve,” said Peter Kinsella, global head of FX strategy at Union Bancaire Privee Ubp SA in London. “We’ve not seen this type of issuance pretty much since the early 1990s when Germany was paying for reunification.”