Asian stock markets are on track for a second consecutive week of gains, fueled by a perceived softening of the U.S. stance on China. The dollar is also poised for its first weekly rise in over a month. This comes despite China stating it has not held trade talks with Washington.
U.S. tech giant Alphabet's positive earnings report, with shares up nearly 5% in after-hours trading, further boosted market sentiment. The S&P 500 futures rose 0.5% following Alphabet's announcement. Overnight, the S&P 500 rose 2% despite mixed corporate results.
In Japan, the Nikkei rose 1.4% on Friday, recovering losses since the April 2 tariff announcement. Tech shares led the gains, with Nidec stock up 11% on a record profit forecast. The U.S. dollar index was up 0.4% for the week at 99.619.
The shift in tone from the U.S. regarding trade with China has been a key factor. According to Reuters, the U.S. previously stated that the situation would be unsustainable. Investors are seeking confirmation of this optimistic stance to justify further dollar gains.
Despite the positive market movements, some analysts remain cautious. The Gold/S&P 500 ratio is at its highest since the 2020 pandemic-driven bear market. Several U.S. companies, including Procter & Gamble and PepsiCo, have cut or withdrawn forecasts due to consumer uncertainty.
Pressure persists on the U.S. Treasury market, with 10-year yields at 4.3168% on Friday. This follows a sell-off triggered by tariff concerns. The market's uneasy calm may not last, given underlying economic uncertainties.