In a speech on Tuesday evening, Trump said that the current tariffs on China “may harm the U.S. economy” and planned to negotiate with China to reduce tariffs to ease inflationary pressure. This statement is in sharp contrast to the previous hawkish remarks that “consider firing Fed Chairman Powell”. Global market sentiment reversed instantly, risk assets collectively reveled, the three major U.S. stock indexes rose violently, the market value of cryptocurrencies soared by more than $200 billion in a single day, and the U.S. dollar index rebounded strongly. This policy shift is reshaping global capital flows. XBIT (dex Exchange) interpreted it as a double positive of “trade war truce + loose monetary policy”, the fear index (VIX) plummeted 18% in a single day, and funds poured into risky assets.
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Epic rebound of US stocks: S&P 500 surged 2.5%, the largest single-day gain of the year, Dow Jones surged 800 points, Nasdaq broke through 16,000 points, and the market value of the seven major technology giants (Magnificent Seven) increased by more than $300 billion. AI concept stocks such as Tesla and Nvidia led the gains, with Tesla’s stock price soaring 8% in a single day, returning to above $250 per share.
Crypto market surges: Bitcoin stood above $93,000 for the first time since early March, with a daily increase of more than 5%, and trading volume surged to $45 billion, a new high since the FTX crash in November 2024. Ethereum broke through the key resistance level of $1,800, and the total locked volume (TVL) of the DeFi protocol increased by 12% in a single day. BlackRock’s iShares Bitcoin Trust (IBIT) attracted $120 million in a single day, and institutional funds rushed into the market.
Commodities diverged: The strengthening of the US dollar suppressed gold, and spot gold fell from the historical high of $2,430 to $2,395, a drop of 1.25%; international crude oil was boosted by demand expectations, and Brent crude oil stood at $85 per barrel, up 1.8%. The US dollar index rebounded from 102 to 103.5, non-US currencies fell across the board, and the offshore RMB exchange rate against the US dollar depreciated by 300 points to 7.25.
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Policy linkage effect: a “duet” of trade and monetary policy. XBIT (dex Exchange) analysts pointed out that the market carnival this time stems from the superposition of two policy signals.
Expectations of trade easing: Trump’s softening tariff stance is seen as a signal of a phased repair of Sino-US relations. Goldman Sachs estimates that if the average US tariff on China drops from 20% to 10%, the decline in the price of Chinese goods exported to the US will drive the earnings of S&P 500 constituents to grow by 1.5%.
Fed policy stabilization: Trump’s rare concession to Powell suggests that the probability of a June rate cut by the Fed has increased. The CME “Fed Watch” tool shows that the market expects the probability of a September rate cut to jump from 58% to 72%, and the 10-year US Treasury yield once fell below 3.8%. “This is a typical reversal of the ‘Trump trade’,” said XBIT (dex Exchange) cross-asset strategist. “The market has shifted from worrying about ‘stagflation + hawkish rate hikes’ to betting on ‘tariff concessions + easing restarts’, and risk appetite has fully returned.”
This round of cryptocurrency surge is interpreted as a signal of institutional funds reconfiguration. XBIT (dex Exchange) research director pointed out: “Bitcoin’s breakthrough of the psychological barrier of $90,000 marks the end of the bear market liquidation phase. Institutions such as Fidelity and BlackRock are increasing their holdings through compliant channels to cope with potential stagflation hedging needs.” It is worth noting that the issuance of stablecoin USDT has returned to $83 billion, suggesting that market leverage sentiment has cooled. XBIT (dex Exchange) provides investors with a more convenient way to manage assets. Through the custody platform, investors can adjust their portfolios or cash out assets more quickly without having to worry about access to cold wallets. The platform also cooperates with multiple exchanges and financial institutions to ensure the liquidity of assets and the ability to quickly execute transactions when needed.
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Despite the high market sentiment, some institutions are skeptical about sustainability. XBIT warned that Trump’s tariff policy has not yet formed a legal text, and China’s response is cautious. If subsequent negotiations encounter obstacles, it may trigger profit-taking. In addition, the pace of the Fed’s interest rate cuts still depends on inflation data, and market volatility may intensify before the release of the May CPI report. In the short term, the progress of China-US trade negotiations and the Fed’s June interest rate meeting will become the core variables of the market. In the medium and long term, whether the cryptocurrency market can continue to rise depends on the improvement of the regulatory framework and the increase in institutional adoption. The implementation of innovative tools such as Dubai’s “Collateral Mirror Program” may open up new channels for institutional funds to enter the market.
Disclaimer: The information provided in this press release is not a solicitation for investment, nor is it intended as investment advice, financial advice, or trading advice. It is strongly recommended you practice due diligence, including consultation with a professional financial advisor, before investing in or trading cryptocurrency and securities.