Wall Street wobbles as trade tensions resurface

US stocks trimmed earlier gains and remained volatile on Wednesday afternoon, with the S&P 500 up around 0.30%, the Nasdaq advancing 0.60%, and the Dow Jones rising by approximately 50 points. Investors weighed strong corporate earnings against renewed geopolitical and economic uncertainties. Tensions resurfaced after President Trump threatened to sever trade ties with China, including the imposition of a potential 100% tariff on Chinese imports, in response to Beijing’s export restrictions on rare earth elements.

The South African rand held steady as investors turned towards riskier assets following dovish comments from Federal Reserve Chair Jerome Powell, who left the door open to further US interest rate cuts. By 13h34 GMT, the rand was trading at 17.3475 against the dollar, about 0.20% stronger than Tuesday’s close, while the US dollar remained flat against a basket of major currencies. On the Johannesburg Stock Exchange, the Top-40 index was last up by 0.30%.

In the UK, the FTSE 100 slipped by 0.10% to around 9 440 as investors weighed growing fiscal concerns and the possibility of tax hikes ahead of the government’s 26 November budget. Chancellor Reeves indicated she is considering both tax increases and spending cuts, with the Treasury likely needing to raise around £30 billion due to rising borrowing costs, the reversal of planned welfare cuts, and weaker growth forecasts.

European stocks rebounded, with the Stoxx 50 climbing nearly 1% and the Stoxx 600 up over 0.50%. Luxury goods led the rally after LVMH surged 12% on stronger-than-expected revenues, boosting shares in Hermès (+7%), Moncler (+7%), Richemont (+6%), Kering (+5.30%), and Burberry (+3.30%). Technology stocks also performed well, with ASML rising 3.40% on upbeat earnings and positive guidance for 2026, supported by demand linked to AI investment.

In Asia, Japan’s Nikkei 225 rose 1.76% to close at 47 673, while the broader Topix index gained 1.58% to 3 184, snapping a two-day losing streak. Japanese equities outperformed US markets, buoyed by Powell’s comments, which reinforced expectations for further US monetary easing.

China’s Shanghai Composite rose 1.22% to 3 912, and the Shenzhen Component climbed 1.73% to 13 119, rebounding from losses in the previous session. Persistent deflationary pressures - with both consumer and producer prices falling in September - strengthened expectations of additional government stimulus to support weak domestic demand and counter ongoing trade challenges.

In commodities, WTI crude oil futures fell 0.70% to settle at $58.30 per barrel, marking a second consecutive day of losses and hovering near a five-month low, as US-China trade tensions and concerns over supply continued to dampen sentiment. Meanwhile, gold prices climbed above $4 200 per ounce, reaching a new record high, driven by safe-haven demand and growing market expectations of further US interest rate cuts.