Weekly market update: Risk appetite is making a comeback in the stock market

Stocks

China–U.S. Trade War

Summary:

Risk appetite returned as Trump softened trade rhetoric, boosting stocks and metals. Oil fell on oversupply fears. Bitcoin rose 10% to $94,000. Markets remain cautious ahead of key economic data releases.

Investors regained their appetite for risk this week as Donald Trump signaled he might significantly reduce tariffs on China and showed no intention of firing Jerome Powell. Stock markets rallied sharply, driven by a surge in U.S. tech stocks and some strong corporate earnings in Europe. Volatility also eased somewhat as expectations for a potential Fed rate cut grew. Positive signs, even if the future remains uncertain.

This week's gainers and losers

TOPS

SAP +8.27%: The German software company reported excellent first-quarter results. SAP is benefiting from the boom in artificial intelligence, with cloud revenue up 26%. The company also confirmed its full-year targets.

Accor +10.96%: The hotel group posted strong first-quarter results, driven by growth in its luxury and lifestyle segment, where revenue per available room (RevPar) rose 8.3%. Accor also reaffirmed its medium-term goals.

Alphabet +7.14%: After weeks of concerns around major U.S. tech stocks, Alphabet’s first-quarter results reassured investors. A key driver was advertising revenue, which grew 9.8% year-over-year. Alphabet also confirmed plans to invest $75 billion in AI infrastructure in 2025.

Bayer +9.32%: The agrochemical and pharmaceutical group is trying to regain momentum. It plans to launch two new molecules and two new indications in 2025 to offset the patent expiration of Xarelto. Bayer hopes to return to growth in its pharmaceutical division by 2027.

FLOPS

Northrop Grumman -12.43%: The U.S. defense company’s results disappointed investors after it raised the cost estimate for B-21 bomber production. As a result, Northrop Grumman booked a $477 million pre-tax charge.

Thales -7.59%: Despite a 70% stock price increase year-to-date, the French defense group’s latest results received a lukewarm market reaction. While sales beat expectations, orders fell 27% year-over-year, partly weighed down by the defense segment.

Reckitt -5.64%: The British consumer goods giant missed expectations with weaker-than-expected organic growth and declines in Europe and North America. As it reorganizes around its core brands, Reckitt plans to sell its Essential Home (household care) division, but analysts are skeptical about finding a buyer.

Weekly market update: Risk appetite is making a comeback in the stock market_1

Commodities

Energy:

Oil prices failed to rebound this week, moving against the broader rally in risk assets. Prices remain under pressure due to concerns about potential overproduction from OPEC+ and its allies. Internal tensions—particularly with Kazakhstan exceeding its production quotas—have fueled discussions about possible supply increases, which could worsen an already fragile market amid stagnant or declining demand forecasts. OPEC has revised down its global demand growth forecast for 2025, citing trade tensions and U.S. tariffs. Meanwhile, progress in nuclear negotiations between the U.S. and Iran could boost oil supply and reduce the geopolitical risk premium. In the background, talks of easing tariffs between the U.S. and China could eventually support demand, as they are the world’s two largest oil consumers. However, current price declines reflect ongoing fears of a global economic slowdown and potential oversupply. Brent is trading lower at $64.75 per barrel, while WTI stands at $61.90.

Metals:

Copper prices rose in London to $9,382 per ton (spot price), supported by hopes of easing trade tensions between the U.S. and China. However, lingering demand concerns and a strengthening U.S. dollar led to some pullback later in the week. Gold briefly hit a new record high at $3,500 an ounce this week, boosted by fears of a potential attempt by Trump to remove the Federal Reserve chair, driving safe-haven demand. Although gold prices eased slightly as trade tensions and Fed fears cooled, the metal remains up 25% year-to-date, supported by strong inflows into gold ETFs and increased central bank buying.

Agricultural Commodities:

In Chicago, wheat prices fell to 546 cents per bushel as rains across the U.S. Plains helped ease concerns about crop conditions. In Europe, the European Commission lowered its wheat production forecast for 2025/26 to 126.3 million tons but raised its stockpile estimate to 8.5 million tons for the same period. Elsewhere, coffee and cocoa prices surged over the past five days—up about 11% and 9%, respectively—driven by strong consumer demand for coffee and chocolate-based products.

Weekly market update: Risk appetite is making a comeback in the stock market_2

Macroeconomics

Market Mood:

It comes and goes. The ongoing tariff saga continues to drive financial markets, with constant twists and turns. While major global indices have managed to perform relatively well amid signs of easing tensions between the U.S. and China, bond yields remain more skeptical, struggling to retreat despite reassuring messages from the Trump administration. Investor confidence in dollar-denominated assets has been badly shaken, and concrete proof of a true normalization in international trade will likely be needed before risky assets regain full favor.The U.S. 10-year yield hovered around 4.274%. Meanwhile, the VIX eased back to 26.7 points, returning to early April levels.

Crypto:

On the regulatory front, change is in the air in Washington. U.S. banking authorities, including the Federal Reserve, have quietly shelved several cautious guidelines concerning banks' exposure to cryptocurrencies—part of a broader pro-crypto shift under the Trump administration. This move gives the sector a little breathing room, though it also reignites debate over the systemic risks these assets might still pose.

Meanwhile, continental Europe remains skeptical. In Switzerland, the central bank firmly refuses to add bitcoin to its reserves. Despite an ongoing referendum campaign and activist pressure promoting bitcoin as a hedge against geopolitical tensions, the Swiss National Bank is standing its ground.

That hasn't stopped bitcoin from surging to around $94,000 by the end of the week, up 10% compared to last Sunday. Meanwhile, the so-called "Trump" cryptocurrency tumbled—despite offering its main holders an exclusive dinner invitation. Nothing is lost; everything is transformed.

Weekly market update: Risk appetite is making a comeback in the stock market_3

The planets have been forcibly realigned in the financial markets. Since Tuesday, stocks have regained some momentum. Driving the rebound: renewed hopes for trade negotiations, easing volatility, falling bond yields amid expectations of a Fed move, solid macroeconomic indicators, and generally resilient corporate earnings. The balance remains fragile, but the rally has held.

This week will be packed with key data releases. On Wednesday, first-quarter GDP figures will be published for France, Germany, and the eurozone, along with a flash estimate for Germany's April inflation and the U.S. PCE index for March. On Thursday, the Bank of Japan is expected to maintain its current rates. Finally, Friday will bring the release of the U.S. monthly jobs report, rounding out a busy calendar.

On the corporate side, earnings season is in full swing. In the U.S., heavyweights including Visa, Microsoft, Meta, Apple, Amazon, and Eli Lilly are set to release their results. In Europe, companies like Schneider Electric, Novartis, Airbus, TotalEnergies, and UBS will report.

Source: marketscreener

Risk Warnings and Disclaimers

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Adam

Commodity

Brent Crude prices continue to consolidate at the start of the week as market participants grapple with a host of challenges.

Among the challenges, market participants are looking for clearer answers from the ongoing US-China trade talks, which have sent mixed signals. At the same time, the US and Iran are making progress on a nuclear deal, with plans to meet again in Europe soon. OPEC+ is set to meet on May 5 to decide on production plans for June.

Some members of OPEC+ are likely to propose increasing oil production faster for the second month in a row during their meeting on May 5. These developments have raised the issue of supply once more at a time when global markets are still trying to make sense of how proposed tariffs and trade deals may shake up demand.

Supply had been expected to increase as the Trump administration had promised to loosen regulation and pump more oil. However, looking at the rig count and the number of active oil rigs went up by two to 483 as of April 25, 2025. However, this is still 23 fewer rigs than at the same time last year.

Drilling activity has increased though for a second consecutive week. This is the first time this has happened since February. The question is however, will the rig count and drilling activity continue to rise if Oil prices remain under pressure?

Technical Analysis - Brent Crude

From a technical analysis standpoint, Brent has remained in a tight range since April 17.

Friday's daily candle closed as a hammer candlestick hinting at further upside. A small push higher in the Asian session has failed to continue after the European open.

Support is currently being tested at 66.44.

Brent Crude Oil Daily Chart, April 28, 2025

Dropping down to an H4 chart, and you can get a better sense of the indecision in oil markets at present.

Price action has seen a lower low being printed which was then followed by a higher high. For now, immediate support at 65.59 needs to hold if bulls are to push prices higher.

The first key area of resistance that needs to be broken rests at around 67.100 which could open up a retest of resistance at 68.17 and the 200-day MA at 69.13.

Brent Crude Oil Four-Hour Chart, April 28, 2025

Client Sentiment Data

Looking at OANDA client sentiment data and market participants are long on WTI with 83% of traders holding long positions. I prefer to take a contrarian view toward crowd sentiment and thus the fact that so many traders are long means WTI prices could decline further.

Source: marketpulse

Risk Warnings and Disclaimers

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Michelle

Political

Pakistan's defence minister said on Monday that a military incursion by neighbouring India was imminent in the aftermath of a deadly militant attack on tourists in Kashmir last week, as tensions rise between the two nuclear-armed nations.

The militant attack killed 26 people and triggered outrage in Hindu-majority India, along with calls for action against Muslim-majority Pakistan. India accuses Pakistan of backing militancy in Kashmir, a region both claim and have fought two wars over.

"We have reinforced our forces because it is something which is imminent now. So in that situation some strategic decisions have to be taken, so those decisions have been taken," Defence Minister Khawaja Muhammad Asif told Reuters in an interview at his office in Islamabad.

Asif said India's rhetoric was ramping up and that Pakistan's military had briefed the government on the possibility of an Indian attack. He did not go into further details on his reasons for thinking an incursion was imminent.

After the Kashmir attack, India identified two suspected militants as Pakistani. Islamabad has denied any role and called for a neutral investigation.

Asif said Pakistan was on high alert and that it would only use its arsenal of nuclear weapons if "there is a direct threat to our existence".

Source: Reuters

Risk Warnings and Disclaimers

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Adam

Commodity

Gold prices are slightly up and silver prices slightly down in early U.S. trading Monday. The precious metals markets are pausing to begin the trading week, and awaiting fresh fundamental news developments. June gold was last up $5.80 at $3,304.20. May silver prices were last down $0.025 at $32.985.

Asian and European stock markets were mixed in overnight trading. U.S. stock indexes are pointed to modestly lower openings today in New York. There is still some risk aversion in the general marketplace to start the trading week.

A Chinese official said over the weekend that U.S. should revoke unilateral tariffs on China if it wants to sort the trade issues between the two nations. He Yadong, a spokesperson for the Ministry of Commerce, also said that China and the U.S. are currently not in talks and the U.S. must show sincerity if it wants to talk. Shipments from China to the U.S. have plummeted 60% since the U.S. raised tariffs to 145% in April, according to broker SP Angel. Meantime, President Trump has said new tariffs on China could come in the next two to three weeks.

The key outside markets today and see the U.S. dollar index firmer. Nymex crude oil futures prices are slightly weaker and trading around $62.75 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently at 4.274%.

U.S. economic data due for release Monday is light and includes the Texas manufacturing outlook survey.

Price pauses for gold, silver to start trading week_1

Technically, June gold futures bulls have the solid overall near-term technical advantage. Bulls’ next upside price objective is to produce a close above solid resistance at the contract high of $3,509.90. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $3,200.00. First resistance is seen at the overnight high of $3,348.20 and then at Friday’s high of $3,384.10. First support is seen last week’s low of $3,270.80 and then at $3,250.00. Wyckoff's Market Rating: 7.0.

Price pauses for gold, silver to start trading week_2

May silver futures bulls have the firm overall near-term technical advantage. Prices are in an uptrend on the daily bar chart. Silver bulls' next upside price objective is closing prices above solid technical resistance at $35.00. The next downside price objective for the bears is closing prices below solid support at $32.00. First resistance is seen at last week’s high of $33.69 and then at $34.00. Next support is seen at the overnight low of $32.585 and then at $32.00. Wyckoff's Market Rating: 7.0.

Source: kitco

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Michelle

China–U.S. Trade War

Treasury Secretary Scott Bessent said “all aspects” of the US government are in contact with China but that it’s up to Beijing to take the first step in de-escalating the tariff fight with the US due to the imbalance of trade between the two nations.

“We’ll see where this goes,” Bessent said in an interview with CNBC. “As I’ve repeatedly said, I believe it’s up to China to de-escalate because they sell five times more to us than we sell to them, so these 125% tariffs are unsustainable.”

The Chinese exempting some goods from tariffs indicates they are interested in reducing tensions, Bessent said, adding that he has “an escalation ladder in my back pocket and we’re very anxious not to have to use it.” Escalation could include an “embargo,” he said.

Bessent said the US has put China to the side for now as it seeks trade deals with between 15 to 17 other countries. He said he wouldn’t be surprised if a trade deal with India is the first to be announced.

Bessent also said that US officials met with their Chinese counterparts during the IMF-World Bank meetings in Washington, DC, last week to talk about “financial stability” but did not indicate that trade discussions came up during the talks.

Source: Bloomberg Europe

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Adam

Stocks

US equity futures posted small moves as investors awaited reports from American companies worth $20 trillion, and watched for progress in US trade talks with Asian partners.

Wild gyrations sparked by President Donald Trump’s April 2 tariff announcements have eased somewhat, but investors will be scrutinizing this week’s key company reports for the earnings impact of US trade policies. Fresh readings on the state of the American economy may support hopes of earlier-than-expected Federal Reserve interest-rate cuts.

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Contracts for the S&P 500 were little changed following a four-day rally in US equities, the longest winning streak since January. Europe’s Stoxx 600 rose 0.5%, boosted by M&A news out of Italy as Mediobanca made a €6.3 billion ($7.1 billion) offer for the wealth management arm of Italian insurer Assicurazioni Generali SpA.

Yields on benchmark 10-year Treasuries climbed five basis points, while the dollar traded little changed. Gold dropped as much as 1.6% as traders unwound positions on signs the metal’s advance may have run too far and too fast.

Four of the so-called Magnificent Seven — Microsoft Corp., Apple Inc., Meta Platforms Inc. and Amazon.com Inc. — are due to report earnings this week. Analysts expect the group — which also includes Google-parent Alphabet Inc., Tesla Inc. and Nvidia Corp. — to deliver an average of 15% profit growth in 2025, a forecast that’s barely budged since the start of March despite the flareup in trade tensions.

In terms of market capitalization, it’s the busiest week of the year for earnings, with S&P 500-listed companies worth $20 trillion reporting.

Meanwhile, Friday’s US non-farm payrolls figures will also turn attention to the health of the American economy.

“In general I think this week’s data won’t be too bad for the economy because it really precedes the announcement of tariffs,” Kathy Jones, chief fixed income strategist at Charles Schwab & Co., told Bloomberg TV. “The inflation numbers shouldn’t be too bad. But I’ll really be watching the ISM numbers at the end of the week and of course, the jobs data where we could see some softness.”

In premarket trading, Boeing Co. shares gained as Airbus SE agreed to take over some assets and sites from Spirit AeroSystems, clearing the way for Spirit to be acquired by Boeing. Nvidia slipped on a Wall Street Journal report that Huawei is getting ready to test an artificial intelligence processor that the Chinese tech giant hopes can replace some Nvidia products.

Investors are also watching for any signs of progress in US trade negotiations after Trump suggested another delay to his higher tariffs was unlikely. Asian economies, facing some of the highest US “reciprocal” tariffs, are leading the way over their western counterparts in talks with the administration.

“Ultimately, it seems that we’re moving towards a place where these policies start to make a little more sense,” Themistoklis Fiotakis, global head of FX strategy at Barclays Plc, told Bloomberg TV. “If this starts shaping up in a place where markets can understand it, can quantify it, then I think that things are going to normalize.”

To help manage the next steps, the Trump team has drafted a framework to handle negotiations with about 18 countries, including a template that lays out common areas of concern to guide the discussions.

US Treasury Secretary Scott Bessent said the administration is working on bilateral trade deals with 17 key partners, not including China. Bessent reiterated the administration’s argument that Beijing will be forced to the negotiating table because China can’t sustain Trump’s latest tariff level of 145% on Chinese goods.

Its standoff with China will likewise limit the potential benefits the US can reap from deals with Asian trading partners, according to Phoenix Kalen, global head of emerging markets research at Societe Generale SA.

“Already there has been a lot of investor sentiment and positioning for some deals to be done, especially with Japan, especially with South Korea,” Kalen told Bloomberg TV. “But the scope is going to be relatively limited and hampered. The concern especially for Asian trade partners around how China will respond to the terms will limit the extent to which they can agree to certain terms with the Trump administration.”

Some of the main moves in markets:

Stocks

S&P 500 futures were little changed as of 7:52 a.m. New York time

Nasdaq 100 futures were little changed

Futures on the Dow Jones Industrial Average were little changed

The Stoxx Europe 600 rose 0.5%

The MSCI World Index rose 0.1%

Currencies

The Bloomberg Dollar Spot Index was little changed

The euro was little changed at $1.1354

The British pound rose 0.2% to $1.3340

The Japanese yen rose 0.2% to 143.37 per dollar

Cryptocurrencies

Bitcoin rose 1.1% to $95,344.86

Ether rose 0.9% to $1,819.53

Bonds

The yield on 10-year Treasuries advanced five basis points to 4.28%

Germany’s 10-year yield advanced four basis points to 2.51%

Britain’s 10-year yield advanced four basis points to 4.52%

Commodities

West Texas Intermediate crude fell 0.2% to $62.89 a barrel

Spot gold fell 0.8% to $3,293.45 an ounce

Source: Bloomberg

Risk Warnings and Disclaimers

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Warren Takunda

Cryptocurrency

Peter Chung, head of research at quantitative trading firm Presto, has repeated his prediction that Bitcoin will reach $210,000 by the end of 2025.

In an April 28 interview with CNBC, Chung cited institutional adoption and global liquidity expansion as the primary drivers behind his long-term bullish outlook.

The analyst acknowledged that market conditions this year haven’t been as expected, specifically the challenging macroeconomic environment and market reaction.

However, he described the recent corrections as a “healthy” adjustment, suggesting they have laid a stronger foundation for Bitcoin’s progression toward becoming a mainstream financial asset.

“In hindsight, I think it was actually a healthy correction which has paved the way for the further re-rating of Bitcoin as a mainstream asset,” he said.

Bitcoin’s dual role

Chung also discussed Bitcoin’s dual nature, describing it as both a “risk-on asset” and “digital gold.”

He said that Bitcoin typically behaves like a high-risk asset driven by user adoption and network effects.

However, during periods of financial instability, such as the 2022 outbreak of the Russia-Ukraine conflict or the 2023 Silicon Valley Bank collapse, Bitcoin tends to act as a safe-haven asset, similar to gold.

“These moments are rare,” Chung explained, “[They] only happened when the market has doubts about the stability of the US dollar-dominated financial system.”

While Bitcoin has lagged behind gold during recent market turbulence, Chung suggested BTC could “catch up” and potentially outperform traditional safe-haven assets by year’s end.

Chung also reaffirmed Presto’s target for Ether, maintaining its valuation model based on the ETH-to-BTC ratio, reflecting confidence in Ethereum’s ongoing network improvements.

Bitcoin hits $94,000 as institutional adoption expands

Echoing Chung’s view, Bitwise CEO Hunter Horsley said in a recent post on X that Bitcoin’s surge to $94,000 has occurred with minimal retail participation, noting that Google searches for “Bitcoin” remain near long-term lows.

According to Horsley, the current rally is being driven by institutional investors, financial advisers, corporations, and even nation-states.

“The types of investors buying Bitcoin is expanding,” Horsley said. Bitcoin Could Hit $210K in 2025, Says Presto Research Head_1

Hunter Horsley pointing out growing Bitcoin adoption among institutions. Source: Hunter Horsley

Corporate Bitcoin treasuries already hold nearly $65 billion worth of BTC, according to data from BitcoinTreasuries.NET.

On April 22, analysts from Standard Chartered and Intellectia AI said institutional Bitcoin demand from exchange-traded funds and traders seeking to hedge against macroeconomic risk could cause Bitcoin’s price to more than double this year.