Global Shares Gain, as US Dollar Steadies Following Recent Steep Plunge

Stocks

China–U.S. Trade War

Summary:

As the tariff spat between China and the United States appeared to abate, along with the prospects of a global trade war, investors have pushed global equities higher, although European shares took a breather on Wednesday.

Global shares gained and major Wall Street indexes were mixed on Wednesday as trade tensions eased between the world's two largest economies, and the U.S. dollar steadied after recent losses.

Gold prices sank to a more than one-month low as the U.S.-China trade truce dimmed bullion's safe-haven appeal.

"It's all about the change in risk appetite," said Lars Skovgaard, senior investment strategist at Danske Bank.

"I have a hard time seeing that we'll go back to this extreme political noise," he added.

MSCI's gauge of stocks across the globe (.MIWD00000PUS) rose 2.04 points, or 0.23%, to 873.24.

On Wall Street, the S&P 500 (.SPX) rose 6.03 points, or 0.10%, to 5,892.58 and the Nasdaq Composite (.IXIC) rose 136.72 points, or 0.72%, to 19,146.81.

The Dow Jones Industrial Average (.DJI) fell 89.37 points, or 0.21%, to 42,051.06.

Europe's STOXX 600 index (.STOXX) closed 0.24% lower, its first loss in five sessions.

Data on Tuesday showing softer-than-expected U.S. consumer inflation also provided some relief to investors worried about the inflationary impact of U.S. tariff policies, which had severely undercut expectations of near-term Fed rate cuts.

Though traders expect inflation to pick up as tariffs lift import costs, the uncertainty over the outlook remains as Washington moves ahead to strike deals with its trading partners.

"U.S. tariffs on Chinese goods are still much higher than they were months ago," said Wei He, China economist at Gavekal Research.

"There's still plenty of uncertainty about the outlook."

ASSESSING TARIFF IMPACT

The Fed has warned of rising economic uncertainty, signalling it is prepared to wait to assess the impact of U.S. tariffs before moving to cut interest rates again. Fed Chair Jerome Powell is scheduled to give remarks on Thursday.

In remarks on Wednesday, Fed Vice Chair Philip Jefferson said recent inflation data point to continued progress toward meeting the Federal Reserve's 2% inflation goal, but the outlook is now uncertain due to the possibility that new import taxes will drive prices higher.

The U.S. dollar, which has taken a beating on the back of the economic and policy uncertainty, extended gains, up 0.14% against a basket of currencies including the yen and the euro.

Global asset managers held their biggest underweight position in the dollar in 19 years in May, as Trump's trade policy cut investor appetite for U.S. assets, Bank of America's global fund manager survey (FMS) showed on Tuesday.

The euro was down 0.15% at $1.1167, and the sterling weakened 0.38% to $1.3253.

Yields on U.S. Treasuries were higher as markets awaited new economic data as well as a clearer picture of future government deficits from discussions in the U.S. Congress.

Euro zone bond yields were steady after nudging up to multi-week highs amid easing trade tensions.

The next major signal for U.S. economic health is retail sales data for April due on Thursday. The same day, talks are planned between Ukraine and Russia in Istanbul with hopes of a ceasefire three years into the deadliest conflict in Europe since World War Two.

In commodities, rising U.S. crude stockpiles pressured prices. Brent crude futures settled 54 cents, or around 0.81%, lower to $66.09 a barrel. U.S. West Texas Intermediate crude slipped 52 cents, or 0.82%, to $63.15.

U.S. gold futures settled 1.8% lower at $3,188.3, and spot gold fell 2.07% to $3,180.07 an ounce.

MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) closed higher by 1.56%, to 614.33, while Japan's Nikkei (.N225) fell 55.13 points, or 0.14%, to 38,128.13.

Hong Kong's Hang Seng index (.HSI) jumped.

Source: Reuters

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Manuel

Cryptocurrency

Stocks

JPMorgan has completed a groundbreaking pilot transaction that bridges traditional finance and blockchain in collaboration with Ondo Finance and Chainlink.

According to a May 14 statement, the banking giant’s blockchain unit, Kinexys, successfully executed a cross-chain atomic settlement using Ondo Finance’s tokenized short-term US Treasury product, OUSG.

This marks the first time Kinexys has connected its permissioned blockchain network with a public Layer-1 chain, leveraging Chainlink’s interoperability infrastructure.

Nelli Zaltsman, head of settlement solutions at Kinexys, said the initiative reflects JPMorgan’s evolving support for institutional clients as they engage with new digital infrastructures.

The executive added: “By securely and thoughtfully connecting our institutional payments solution with both external public and private blockchain infrastructures seamlessly, we can offer our clients and the broader financial ecosystem a wider range of benefits and scalable solutions for settling transactions.”

JPMorgan’s test transaction

The landmark test transaction occurred on the testnet of Ondo Chain, a blockchain purpose-built by Ondo for real-world asset tokenization. It used a Delivery versus Payment (DvP) model, which allows simultaneous transfers of assets and payments to reduce settlement risk.

Traditional DvP transactions can often face delays due to fragmented systems and manual processes associated with legacy systems. Industry estimates show that these inefficiencies have cost market participants over $900 billion in the past decade.

The complexity multiplies in cross-border transactions, where varying regulations, currencies, and jurisdictions introduce further friction.

Using blockchain rails, Kinexys and its partners demonstrated a real-time settlement process that reduces manual intervention, reduces counterparty risk, and improves liquidity. Chainlink provided the messaging framework that synchronized actions across both blockchain networks.

Kinexys relied on blockchain-based deposit accounts to complete the payment side of the trade, while Chainlink ensured data consistency across the permissioned and public chains. This reduced operational friction and delivered finality within seconds.

Chainlink co-founder Sergey Nazarov called the pilot a milestone in bridging traditional and decentralized finance. He noted that global institutions now recognize the strategic need for secure public blockchain access and robust cross-chain tools to unlock new markets.

Source: Cryptoslate

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Manuel

Central Bank

Economic

At least one official at the Federal Reserve is still skeptical about the trajectory of inflation and the economy, despite developments this week that cheered investors.

Philip Jefferson, vice chair of the central bank, said there was equal risk that President Donald Trump's tariffs could push up inflation and hurt the job market, speaking at a conference in New York Wednesday. With those two dangers in mind, he said, the Fed should wait and see what happens with the economy before making any changes to its monetary policy, such as cutting borrowing costs.

"If the increases in tariffs announced so far are sustained, they are likely to interrupt progress on disinflation and generate at least a temporary rise in inflation," Jefferson said. "Whether tariffs create persistent upward pressure on inflation will depend on how trade policy is implemented, the pass-through to consumer prices, the reaction of supply chains, and the performance of the economy."

Jefferson's remarks came on the heels of developments in the economy and Trump's trade war, which encouraged financial markets and sent stocks soaring. On Monday, U.S. and Chinese officials said the two nations would drop some of the import taxes they'd imposed on one another over the last few months. And on Tuesday, an official report on inflation showed consumer prices rose less than expected in April.

Still No Signs of Tariff-Related Economic Stress—Yet

In the early days of Trump's tariff campaign, surveys of individuals and businesses have flashed warning signs of job losses and higher prices ahead. However, hard data on unemployment and prices show few, if any, signs of distress.

The Federal Reserve's stance lately has been one of patience. The Fed is tasked with the "dual mandate" of keeping inflation and joblessness under control. The central bank's policy-setting committee uses its main tool, the influential fed funds rate, to try to keep both of those metrics stable.

Late last year, the Fed steadily cut rates from a 20-year high. The Fed has kept rates flat out of concern that Trump's tariffs could reignite inflation, much to the president's ire.

At the same time, business leaders and economists have warned tariffs could cause an economic slowdown and job losses, which the Fed could address by cutting its benchmark interest rate. A lower fed funds rate could make all kinds of loans cheaper, boosting the economy and hiring, though at the risk of stoking inflation.

The latest inflation data haven't been enough to completely quell those fears of price increases, at least not for Jefferson, one of 12 officials who vote on interest rate moves.

"With the increased risks to both sides of our mandate, I believe that the current stance of monetary policy is well positioned to respond in a timely way to potential economic developments," Jefferson said.

Source: Investopedia

To stay updated on all economic events of today, please check out our Economic calendar

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Adam

Stocks

The appointment of Paul Atkins as the new Chairman of the U.S. Securities and Exchange Commission (SEC) has paved the way for a new era of regulatory clarity for the crypto industry.

The agency has already taken down its appeals against Ripple and XRP has seen its price performance improve as a result.

Moreover, the market’s sentiment has shifted from extremely bearish to moderately bullish in just a month as reflected by the behavior of the Fear and Greed Index.

Market Cap of RLUSD Rises to $300M

Ripple has also made some interesting moves this year like the launch of Ripple USD (RLUSD) – the blockchain’s first native stablecoin.

XRP Price Forecast: ETF Approval and Bullish Chart May Send XRP to New Records_1

Ripple USD (RLUSD)

The market cap of this new stablecoin has jumped from $50 to $300 million just a few months after its launch as it has been embraced by top exchanges like Kraken already.

Meanwhile, the SEC will make a decision next month on what could be the first XRP-linked exchange-traded fund (ETF) to hit the market.

The Franklin XRP Fund received a notice of “longer period” from the Commission in late April. This means that the SEC can take up to 90 days to decide if this proposed vehicle can be listed on the Cboe BZX Exchanges as intended.

XRP Price Forecast: ETF Approval and Bullish Chart May Send XRP to New Records_2

SEC Notice of Long Period for Ripple ETF

The deadline in this case is set at June 17, at which point the agency “shall either approve or disapprove, or institute proceedings to determine whether to disapprove, the proposed rule change.”

The approval of an XRP-linked spot ETF could result in significant capital inflows for the token, which supports a bullish short-term outlook.

Retail interest in XRP is quite high as indicated by Google search volumes. XRP is one of the most heavily searched crypto-related keywords and far exceeds the public’s interest in Bitcoin based on these metrics.

Hence, an ETF linked to the token, which is a vehicle that makes it easier for both retail and institutional investors to get exposure to the asset, will likely result in significant liquidity coming its way.

XRP Needs a Clean Break Above $2.8

XRP’s daily chart shows a bullish breakout above the 21-day exponential moving average (EMA) on May 8 that has been followed by 4 out of 6 winning sessions for the token.

XRP Price Forecast: ETF Approval and Bullish Chart May Send XRP to New Records_3

XRP/USD Daily Chart (Coinbase)

Both the 21-day and 200-day EMAs are on an uptrend and the trend’s strength is high as indicated by the Relative Strength Index (RSI), whose value is approaching ‘overbought’ levels.

Meanwhile, the MACD’s histogram has been trending higher for the past week and trading volumes recently have been either at or above the 14-day average.

XRP broke out of its descending price channel and has already pushed through its nearest lower high, meaning that the downtrend has been successfully reversed. Hence, the token’s outlook is bullish and its next target could be the $3.2 area.

Currently, XRP hit a key volumetric resistance at $2.8. Trading volumes at this level have been strong throughout the year. Hence, bulls need to capture this area to keep the rally going.

The next high-volume zone is exactly at $3.2. Hence, a bullish breakout above this current resistance could lead to a big push to that target and to all-time highs next if the rally keeps going.

Source: fxempire

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Adam

Economic

The May survey is unusual in that it was conducted between May 2 and 8, before the announcement of the US-China summit in Geneva for 75% of respondents, and after the announcement for the remaining 25%. Nevertheless, the survey shows that financiers were already less inclined to hang themselves than in April. Translation: they had already started betting on a trade de-escalation even before the Swiss weekend meeting between Chinese and US representatives.

The survey shows that managers anticipated an average tariff rate on Chinese products of around 37% after the initial negotiations. The actual figure ended up being 30%. Not as bad as expected, i.e. better. The result: a slight boost to the markets at the beginning of the week. And since the relaxation came quickly, the bullish momentum didn't even have time to falter.

Amongst the data available to our limited minds, three points are worth noting:

US deficit: lost illusions.

75% of professionals believe that tax cuts will further increase the US deficit. Few believe that growth will offset the bill. This skepticism could soon be reflected in expectations for US debt. And given the difficulty of rates to fall, this may already be the case.

Stockmarket: are the pros abandoning gold and pharmaceuticals?_1

Everyone wanted gold

For the second month in a row, the most crowded marketplace was buying gold. The barbarous relic dethroned tech, whose "Magnificent Seven" had held the top spot for two years. It remains to be seen how long this will last: the yellow metal lost 5% in a week as FOMO struck back.

Stockmarket: are the pros abandoning gold and pharmaceuticals?_2

Pharma, still heavily weighted

Fund managers were still heavily positioned in pharma at the beginning of May, although they have started to reduce their positions. They could be in for some nasty surprises, given the sector's difficult run since Donald Trump chose it as his punching bag - instead of Jerome Powell. The big contrarian leveraged bets at the beginning of the month were to buy energy and discretionary consumption... two winning trades 15 days later!

Stockmarket: are the pros abandoning gold and pharmaceuticals?_3

Source: marketscreener

To stay updated on all economic events of today, please check out our Economic calendar

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Adam

Stocks

Nvidia (NVDA) and other AI stocks climbed Wednesday, extending Tuesday's gains as Saudi Arabian partnerships announced during President Donald Trump's four-day trip to the Middle East stoked excitement for future deals.

Wedbush analysts said the deals announced Tuesday, which will see Nvidia and Advanced Micro Devices (AMD) supply semiconductors to Saudi AI startup Humain, is “just the beginning” for AI-driven partnerships in the Middle East. “We expect bigger AI deals on the horizon,” potentially involving companies such as Palantir (PLTR) or Tesla (TSLA), the analysts said.

The Saudi AI investment could also help offset the impact of restrictions on sales of AI chips to China, Bank of America analysts said. Nvidia warned last month it could take a $5.5 billion charge related to limits on exports of its H20 chip, while AMD warned it would face an $800 million hit.

Nvidia shares were up close to 4% in recent trading, while AMD added more than 5%. Shares of Super Micro Computer (SMCI), an AI server maker partnered with both companies, rocketed higher for the second day in a row after announcing its own Saudi deal. Meanwhile, Palantir ticked up 1% a day after hitting a record high, and Tesla gained 3%.

Source: Investopedia

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Manuel

Cryptocurrency

Ethereum has lagged behind Bitcoin and alternative Layer 1s throughout this cycle amid a wave of relative bearishness.

And yet, since the crypto market's April lows, ETH has surged nearly 100% - gaining 65% in the last 30 days alone to tap $2,750, back above pre-election levels (and key technical levels). What's Behind Ethereum's Recent Price Surge?_1

What's Behind Ethereum's Recent Price Surge?_1

So what's driving the move?

Analysts at research and brokerage firm Bernstein, led by Gautam Chhugani, said in a Wednesday note to clients that several narratives have been put forward attempting to explain this performance.

While bitcoin claimed all-time highs, crossing the psychological $100,000 barrier, the ETH/BTC ratio has dropped 45% over the past year as bitcoin dominated store-of-value mindshare amid the success of Bitcoin exchange-traded funds and corporate treasury adoption, while retail flows shifted to faster Layer 1s like Solana, the analysts wrote.

Ethereum, caught between its Layer 2 roadmap and limited ETF traction comparatively, was "stuck somewhere in the middle," they added - neither the best store of value, nor the best blockchain destination for speculative retail trenches.

Stablecoins and tokenization, Layer 2 institutionalization, and an ETH short unwind

However, according to the analysts, the narrative is beginning to change amid a boom in stablecoin and securities tokenization, Layer 2 institutionalization, and an ETH short unwind.

The cycle is expanding beyond store-of-value use cases, they said, with stablecoin payments and tokenized securities gaining real traction.

Stripe's $1.1 billion acquisition of stablecoin platform Bridge and Meta's recent comments about reigniting its stablecoin venture are helping to bring back a focus on the underlying blockchains, and Ethereum — which holds 51% of the total stablecoin supply — is emerging as the key platform proxy for this growth trend, they added.

Traditional finance giants like BlackRock and Franklin Templeton are also advancing adoption of a real-world asset tokenization market now valued at over $22 billion, according to RWA.xyz — with Ethereum again dominating deployment.

Secondly, while critics question the value accretion of Layer 2s to ETH, the Bernstein analysts said that with networks like the Coinbase-incubated Base earning revenue of around $84 million last year, Ethereum Layer 2s are taking a growing role in institutional crypto infrastructure. With Robinhood's recent acquisition of WonderFi — which also runs an Ethereum Layer 2 — brokers may soon offer tokenized equities on their own chains, they argued. Since these Layer 2s use ETH for gas and settlement, they help drive Ethereum demand and position it as a leading platform for institutional smart contract adoption, they added.

Finally, the third driver of ETH's recent outperformance is more tactical, in the analysts' view. Over the past 12 to 18 months, crypto hedge funds have often used ETH as a delta-neutral hedge - staying long BTC and SOL while shorting ETH. But as the narrative shifts toward institutional adoption of blockchain and stablecoin payments, and beyond store of value, ETH's role as the underperformer is becoming harder to justify, they said. What's Behind Ethereum's Recent Price Surge?_2

What's Behind Ethereum's Recent Price Surge?_2

As a result, the resurgence of ETH and other non-bitcoin assets is good for crypto exchanges and broker-dealers, they argued, as a broader crypto market rally reinvigorates retail traders, driving stronger volumes.