As Trump "conceded," on April 24th, the three major U.S. stock indexes all closed higher last night. The Dow Jones Industrial Average (DJIA) rose by 1.07% to 39606.57 points, the S&P 500 Index increased by 1.67% to 5375.86 points, and the Nasdaq Composite Index surged by 2.5% to 16708.05 points.

In particular, among the seven major tech giants, the impact of Musk's related actions continued to spread, with Tesla rising more than 5%. The other six companies also generally saw gains, with Facebook rising by 4%.

Movements of the seven major technology giants iFinD

In the early hours of the U.S. stock market, media reports suggested that the White House might ease its tariff policies, pushing the three major U.S. indices to new intraday highs in the morning session. The DJIA rose nearly 1190 points, or about 3%, the S&P 500 index surged over 3.4%, and the Nasdaq gained nearly 4.5%.

However, market sentiment was not fully calmed. In the latest edition of the Federal Reserve's "Beige Book" released at midnight, the word "tariff" appeared 107 times, and words related to "uncertainty" occurred 89 times. The report pointed out that since early March, there has been little change in economic activity in the United States, and under the increasing economic uncertainty, the outlook for several Federal Reserve districts "significantly deteriorated".

At the end of the early trading session, Treasury Secretary Betsen mentioned that there was an opportunity for the two major economies to reach a "major" trade agreement, keeping the three major U.S. stock indexes in positive territory. The Nasdaq rose more than 4%, the S&P also increased more than 3%, and the DJIA rose more than 2%. However, later, Betsen said that Trump had not yet proposed reducing tariffs on any economy, and a comprehensive trade agreement between both sides might take two to three years. Trump would not unilaterally reduce tariffs, causing the three major indices to lose more than half of their morning gains during the afternoon session.

Federal Reserve releases latest U.S. economic conditions report

Early this morning, the Federal Reserve released the latest edition of the U.S. Economic Conditions Report (commonly known as the "Beige Book"). According to statistics, the word "tariff" appeared a total of 107 times in this report, and words related to "uncertainty" appeared 89 times.

With the increase in economic uncertainty, particularly regarding tariffs, the outlook for several regions "significantly worsened." The Beige Book showed that since the previous report, there has been little change in economic activity, but the uncertainty surrounding international trade policies was widespread across all reports. Only five regions reported slight growth in economic activity, three regions reported no significant change, and the remaining four regions reported slight declines.

At the same time, prices in all regions have risen. Most regions noted that businesses expected tariffs to accelerate the growth of input costs. Many companies reported receiving notices from suppliers about cost increases, and most businesses indicated they planned to pass these higher costs onto consumers. Companies reported adding tariff surcharges or shortening pricing cycles to cope with uncertain trade policies.

The Beige Book also showed that overall U.S. employment remained unchanged or slightly increased. The report pointed out that positions in government agencies and institutions dependent on government funding decreased. This likely reflects the Trump administration's efforts to reduce federal workforce numbers and cut costs: several regions reported that companies were adopting a wait-and-see approach to hiring, pausing or slowing recruitment until the economic situation became clearer. Additionally, scattered reports indicated that some companies were preparing for layoffs.

Leisure and business travel both declined, and the number of international tourists fell in some regions. Home sales increased, and many regions maintained low inventory levels; net loan demand remained flat or slightly increased; demand for non-financial services declined in some regions.

Transportation activities slightly increased. Manufacturing performance varied, but two-thirds of the regions reported little change or a decline in manufacturing activities. The energy sector slightly increased. Agricultural conditions remained relatively stable in several regions. With the increase in economic uncertainty, especially around tariffs, the outlook for multiple regions significantly deteriorated.

This latest version of the Beige Book was compiled by the Atlanta Fed, using information collected as of or before April 14th. The report includes comments and anecdotes on business conditions from the 12 Federal Reserve districts and is directly sourced from businesses and other contacts.

White House may ease tariff policies

On April 23rd local time, The Wall Street Journal cited informed sources exclusively reporting that the Trump administration is considering significantly reducing the high tariffs imposed on Chinese imports, with reductions exceeding 50% in some cases. This move aims to ease tensions between China and the United States, which have disrupted global trade and investment activities. Sources revealed that President Trump has not made a final decision, and the discussions remain subject to change, with multiple options being considered.

At the end of the early trading session, Treasury Secretary Betsen delivered a keynote speech at the Institute of International Finance. In his speech, he stated that the U.S. and China have an opportunity to reach a major agreement: reshaping trade balance through strengthening manufacturing on the American side, while China reduces its reliance on exports and focuses more on domestic circulation. If China takes steps in this direction, the U.S. and China can cooperate together.

However, later, when Betsen was interviewed, he refuted the Wall Street Journal's report that the Trump administration was considering cutting tariffs on Chinese imports to 50%-65%, saying that such a thing does not exist.

Additionally, he mentioned that achieving a comprehensive structural rebalancing between China and the U.S. might take two to three years. However, negotiations with other countries would not take as long because the U.S. had already listed a "trade barrier list" for what it hoped other countries would adjust. He said that in terms of non-tariff measures, the U.S. knew exactly what it wanted; tariffs themselves were relatively easy to resolve, after all, no country wanted to stay at the peak level of tariffs seen on April 2nd.

Dollar assets still face challenges

Despite the positive reaction in U.S. markets and dollar assets on Wednesday, market participants are still assessing scenarios where the U.S. economy may slow down or the dollar could continue to weaken in the coming years.

A recent survey by Bank of America revealed that after the Trump administration introduced so-called "reciprocal tariffs," institutional views on the U.S. stock market quickly turned pessimistic. In April, 36% of institutions reduced their holdings of U.S. stocks. The survey also found that sentiment levels were the fifth lowest ever, with fund managers' cash holdings spiking to 4.8%, the highest level since 2020. Global growth expectations have fallen to a 30-year low, with 49% of respondents indicating that a hard landing is the most likely outcome for the global economy over the next 12 months.

Economic data continues to warn of risks. The most closely watched data this week, the S&P U.S. Composite Purchasing Managers' Index (PMI) for April fell to a 16-month low of 51.2, nearing the threshold. Among them, the service sector index fell from 54.4 last month to 51.4 in April. Chris Williamson, chief business economist at S&P Global, said: "Confidence in business conditions over the next year has sharply deteriorated. Tariffs are considered the main cause of price increases." He said that this will inevitably lead to higher consumer inflation.

The business confidence index hit its lowest level since July 2022. The new orders index fell from 53.3 in March to 52.5, mainly due to the decline in service exports, including tourism-related activities and cross-border activities of service providers. Inflationary pressures are building, with the enterprise goods and services price index rising from 53.5 in March to 55.2 in April, the highest point in nearly 13 months, driven primarily by manufacturers.

Many Wall Street professionals believe that dollar assets will continue to face ongoing challenges. Peter Azzinaro, partner and senior portfolio manager at Agile Investment Management, believes that in the long term, capital trends will diversify investments from the U.S. to Europe and Asia. This may be a process spanning several years, if not decades, and has just begun.

On the other hand, the massive U.S. debt remains a cause for concern. As of this Wednesday, this figure was approximately $36.2 trillion. It was reported that $6.5 trillion worth of U.S. Treasury bonds will mature in June, accounting for 70.7% of the total $9.2 trillion in maturing debt for the year, largely due to the concentration of low-interest five-year Treasury bonds issued during Trump's term in 2020 to address the pandemic. "For decades, the dollar has been a safe haven, but investors are beginning to question this given our debt levels. Trump amplified the U.S. debt issue, although our debt levels are not his fault," Azzinaro said.

This article is an exclusive contribution by Guancha Observer and cannot be reprinted without permission.

Original source: https://www.toutiao.com/article/7496681178918617619/

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