Asian shares firmed on Thursday after U.S. President Donald Trump signaled progress on a new trade deal and the Federal Reserve held interest rates steady, giving investors room to hope for easing global tensions and stable policy ahead.
S&P 500 futures reversed earlier losses to gain 0.5%, Nasdaq futures added 0.7%, and Europe’s STOXX 600 index climbed 0.7%, while FTSE futures rose 0.5%.
Trump teased a major trade agreement with an unspecified nation—reported by The New York Times to be the UK—fueling optimism ahead of critical U.S.-China trade talks scheduled for Saturday.
Meanwhile, market focus turned to central bank decisions across Europe, with the Bank of England expected to cut rates by 0.25 points. Sweden and Norway’s central banks are also set to announce policy updates, though no changes are anticipated.
Overnight, the Fed kept its policy rate steady at 4.25%-4.5% and flagged rising risks from both inflation and unemployment. Markets trimmed the probability of a June rate cut to 20% from 30%, while expectations for a July cut dropped slightly but remained high at 70%.
ING’s chief international economist James Knightley noted, “Rate cuts could be delayed, but risk being sharper when they come.”
This cautious Fed stance helped lift the U.S. dollar, though the dollar index dipped slightly by 0.1% in Asian trading, sitting at 99.803 after a 0.3% overnight jump.
U.S. stocks rose on Wednesday, driven by Fed comments and Trump’s trade hints, particularly benefiting semiconductor shares. Nvidia stock surged 3% on expectations that the administration may roll back export restrictions on advanced AI chips.
In Asia, Japan’s Nikkei edged up 0.2%, while Chinese blue chips and Hong Kong’s Hang Seng Index each gained 0.4%, boosted by Beijing’s midweek rate cut and additional liquidity injections.
Commodities also rebounded. U.S. crude futures rose 0.5% to $58.34 per barrel, and Brent increased to $61.34, up 0.4%. Gold prices rallied 0.7% to $3,390 an ounce as investors sought safe havens amid Fed uncertainty, though still below its $3,500 record high.
Looking ahead, markets are bracing for the U.S.-China trade talks in Geneva, which analysts believe could provide a turning point in ongoing economic tensions.
