U.S. Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer will meet with their Chinese counterparts for trade negotiations in Switzerland this week, their offices said on Tuesday.

Both Bessent and Greer will meet with Swiss President Karin Keller-Sutter, and will also meet with their counterparts from the People’s Republic of China “to discuss trade matters,” their respective offices said in a statement. The two will travel to Switzerland on May 8.

“I look forward to productive talks as we work towards rebalancing the international economic system towards better serving the interests of the United States,” Bessent said in a statement. 

China’s Foreign Minister said that Vice Premier He Lifeng, Beijing’s lead official in U.S.-China trade matters, will meet Bessent in Switzerland, according to NBC. 

The talks mark a potential thaw in Sino-U.S. relations, after the two countries became embroiled in a bitter trade war through April. U.S. President Donald Trump had imposed 145% tariffs on Chinese goods, drawing retaliatory measures of 125% from Beijing. 

The tariff exchange had rattled global markets with the prospect of widespread economic disruptions, with recent data points from China and the U.S. already showing some deterioration. 

U.S. stock index futures- which had initially fallen on Tuesday evening- rose after the trade talks were announced. S&P 500 Futures were up 0.7% by 19:15 ET (23:15 GMT). 

The announcement of the talks in Switzerland comes following some encouraging comments from both Chinese and U.S. officials, that they were open to trade talks. Bessent has also repeatedly warned that the steep trade tariffs were unsustainable, and that he expects deescalation soon.

The S&P 500 closed lower Tuesday as investors assessed a lack of updates on U.S.-China trade progress and awaited the Federal Reserve rate decision due Wednesday.  

At 4:00 p.m. ET (20:00 GMT), the Dow Jones Industrial Average dropped 397 points, or 1%, the S&P 500 index slipped 0.8%, and the NASDAQ Composite fell 0.9%. 

Trump says China willing to negotiate on trade, but stops shorts of signalling progress

President Donald Trump said China wanted to negotiate a trade deal to end the current trade war, but stopped short of signalling urgency to resolve the conflict, saying the U.S. and China would meet the right time.

Markets had briefly cut some losses on hopes of a major announcement on trade after Trump touted he would have "very, very big announcement to make," ahead of his administration’s trip to the Middle East. But the reprieve was short lived after Trump said the big announcement may "not necessarily" be on any trade-related development. 

Fed meeting looms large

The Fed kicks off its two-day meeting Tuesday, with the central bank expected to hold interest rates steady when it concludes on Wednesday.

Fed Chair Jerome Powell recently signalled that the policymakers are in a wait-and-see mode amid tariff concerns. This comes despite overt pressure from President Trump and Treasury Secretary Scott Bessent to cut policy rates.

Given the decision is largely seen as a forgone conclusion, the focus will be on comments from Powell to get insights into the Fed’s future rate path.

A reading of activity in the key U.S. services sector, which accounts for more than two-thirds of the economy’s output, was stronger than anticipated, signaling that businesses may be able to shrug off headwinds from the tariffs. Still, a metric of prices paid by services companies rose, adding to worries that the duties could fuel inflationary pressures.

The U.S. goods and services deficit widened in March following an uptick in imports as businesses raced to lock in prices before the implementation of elevated tariffs.

Adjusted for seasonality but not price changes, the trade gap rose by 14.0% to $140.5 billion from a downwardly-revised $123.2 billion in February, according to data from the Commerce Department’s Bureau of Economic Analysis on Tuesday.

Corporate results continue

There have been a number of corporations releasing quarterly earnings Tuesday, as the first-quarter results season continued.

Ford (NYSE:F) stock rose more than 2% even as the auto giant slashed its full-year guidance, noting uncertainty around the outlook due to Trump’s tariffs.

Palantir Technologies (NASDAQ:PLTR) stock slumped about 12% after the artificial intelligence-focused data firm reported quarterly numbers that disappointed heightened market expectation, even as it lifted its annual sales guidance.

Tesla (NASDAQ:TSLA) stock fell more than1% after the EV manufacturer saw a significant drop in its sales volume in Germany in April, while new car sales in the United Kingdom dropped by 62% year-on-year, hitting their lowest point in over two years.

DoorDash (NASDAQ:DASH) stock fell more than 7% after the food delivery company’s first-quarter revenue fell short of estimates, while also confirming it has made a formal offer to acquire U.K. rival Deliveroo (LON:ROO).

Mattel (NASDAQ:MAT) stock added more than 2% despite the toymaker pausing its 2025 full-year guidance due to tariff uncertainty. The paused on guidance came as the company reported quarterly results that were better than feared.

(Peter Nurse, Ayushman Ojha contributed to his article.) 

After nearly three years, France’s manufacturing sector has experienced an increase in output, according to a survey published on Friday.

Increased military spending could potentially balance out the uncertainties caused by U.S. tariffs.

The final purchasing managers index (PMI), a key indicator of economic health in the manufacturing sector, rose to 48.7 in April from 48.5 in March. This information was compiled by S&P Global for the HCOB.

It is worth noting that the PMI is an important economic indicator, measuring the activity level of purchasing managers in the manufacturing sector.

A PMI above 50 represents an expansion when compared to the previous month, while a PMI under 50 represents a contraction.

The rise to 48.7, though still under 50, marks a significant improvement for France’s manufacturing sector.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

By Leika Kihara and Makiko Yamazaki

TOKYO (Reuters) -Japan could use its $1 trillion-plus holdings of U.S. Treasuries as a card in trade talks with Washington, its finance minister said on Friday, raising explicitly for the first time its leverage as a massive creditor to the United States.

While Finance Minister Katsunobu Kato did not threaten to sell holdings, his remarks touch on a critical concern global investors have about what Japan and China, the two largest owners of U.S. government debt, might do in seeking tariff concessions from the Trump administration.

The Treasury market saw a huge global sell-off last month after U.S. President Donald Trump’s decision on April 2 to slap sweeping tariffs on trading partners, including key strategic allies such as Japan.

Kato said in a television interview the primary purpose of Japan’s U.S. Treasury holdings - the largest in the world - is to ensure it has sufficient liquidity to conduct yen intervention when necessary.

"But we obviously need to put all cards on the table in negotiations. It could be among such cards," he said when asked whether Japan, in trade talks with the U.S., could reassure Washington it will not sell its Treasury holdings in the market.

"Whether we actually use that card, however, is a different question," Kato added.

The U.S. Treasury Department did not immediately respond to Reuters’ request for comment outside of office hours.

Kato’s remarks contrast with those he made last month, when he ruled out using Japan’s U.S. Treasury holdings in trade negotiations.

On Friday, Kato declined to comment on whether Tokyo’s U.S. bond holdings came up in his bilateral meeting with Treasury Secretary Scott Bessent last week.

However, he said the huge market sell-off in Treasuries in April likely affected Washington’s approach in talks with Japan.

Japan’s and China’s presence in the Treasury market makes them a huge point of attention whenever U.S. yields spike, although little is known about their trading activity.

While Japan, as a close U.S. ally, is seen as less likely to use its Treasury holdings as a bargaining tool, some analysts speculate that China may liquidate its holdings as a "nuclear" option as trade tensions with the U.S. escalate.

So far, there are few signs of such a sell-off. Foreign holdings of U.S. Treasuries rose 3.4% in February, data from the Treasury Department showed last month, with the two largest owners, Japan and China, building up their U.S. debt positions.

But even hints of their huge market presence could be a key weapon for Japan, which otherwise has little leverage due to its economy’s huge reliance on the U.S. car market.

"Playing the card early, while the U.S. bond market is in the minds of the administration after recent weeks, is a smart move," said Martin Whetton, head of financial markets strategy at Westpac in Sydney. "They don’t have to do anything. But they can put themselves in a solid position to negotiate. It is, after all, the art of the deal."

Japan’s top trade negotiator, Ryosei Akazawa, said he deepened talks on trade, non-tariff measures and economic security cooperation in his second round of talks with Bessent in Washington on Thursday. He also said the two sides hoped to hold their next meeting in mid-May.

USE ALL TOOLS

The U.S. Treasury sell-off in April was among factors that led Trump to announce a 90-day pause on his "reciprocal" tariff plan, with Bessent likely playing a key role, according to sources close to the White House.

Aside from the tariffs, Japan has also faced criticism from Trump that it was intentionally weakening the yen to give its exports a trade advantage - an accusation Tokyo denies.

Kato said his meeting with Bessent last week did not discuss any desirable exchange rate or a possible framework to control currency moves.

Analysts say Japan’s huge Treasury holdings can also be used as a bargaining tool in any differences Washington has with Tokyo over currencies.

"(It) should be a card if not an ace card for the negotiation," said Naka Matsuzawa, chief macro strategist at Nomura Securities in Tokyo. "It would work not only to flatten the (bond yield) curve in the two countries but also avoid other outrageous requests such as artificial yen appreciation."

But there are at the same time limits to such threats as unloading Treasuries would hurt Japan and China by disrupting markets and causing huge losses on their remaining holdings.

Given the hit Japan and China themselves would suffer from selling their U.S. Treasury holdings, the idea was an "absolute non-issue in the past," said Nathan Sheets, former U.S. undersecretary for international affairs who is currently global chief economist at Citi Research.

"But countries have to use all the tools they have," he said. "The fact that we need to think about something like that shows the world we’re in."

SEOUL (Reuters) -South Korea’s consumer prices rose 2.1% in April over a year, slightly above market expectations, official data showed on Friday.

That compared with a 2.1% rise in March and 2.0% tipped in a Reuters poll of economists.

The consumer price index rose 0.1% on a monthly basis, after rising 0.2% in the previous month. It was the slowest since November 2024.

The S&P 500 rose Thursday as robust earnings from Microsoft and Meta Platforms, provided fresh signs that the artificial intelligence boom is far from over, fueling gains across stocks. 

At 4:00 p.m. ET (20:00 GMT), the Dow Jones Industrial Average gained 82 points, or 0.6%, the S&P 500 index added 0.6%, and the NASDAQ Composite gained 1.5%.

Microsoft, Meta surge after strong Q1 results

Meta Platforms (NASDAQ:META) shares jumped more than 4% after quarterly results and guidance topped consensus. The parent company of Facebook and Instagram anticipated full-year 2025 capital expenditures in the range of $64-$72 billion, increased from their prior guidance of $60-65 billion. 

"We believe the higher level of investment is justified, as the infusion of AI capabilities across the company’s ad stack and content recommendation engines are already driving tangible benefits for Meta’s Family of Apps and Reality Labs," Wedbush said in a Thursday note.

Microsoft (NASDAQ:MSFT) shares surged more than 7% after the software giant’s first-quarter revenue increased 13%. It also forecast cloud-computing revenue growth of 34% to 35% for the fiscal fourth quarter.

"Microsoft surprised with a much better-than-expected top-line performance, saying that through late-April they had not seen any material demand pressure from the macro/tariff issues," RBC said in a Thursday note.

There are more corporate earnings to digest Thursday, with the highlights being from iPhone-maker Apple (NASDAQ:AAPL) and e-commerce titan Amazon (NASDAQ:AMZN) after the close.

Elsewhere, McDonald’s (NYSE:MCD) stock fell more than 1% after the fast food giant posted a surprise decline in first-quarter global comparable sales, with CEO Chris Kempczinski adding the company was navigating the "toughest of market conditions."

Eli Lilly (NYSE:LLY) stock dropped 11% after the drugmaker posted disappointing sales of its popular weight-loss drug, Zepbound.

Biogen (NASDAQ:BIIB) stock rose slightly after the drugmaker beat first-quarter profit and revenue expectations, as strong demand for its rare disease drugs helped offset declining sales of its multiple sclerosis drugs.

Estee Lauder (NYSE:EL) stock fell more than 11% after flagging ongoing challenges in its travel retail business and subdued consumer sentiment in Asia.

Initial claims rise

The number of Americans filing new applications for unemployment benefits increased more than expected last week, as initial claims for state unemployment benefits jumped 18,000 for the week ended April 26, the Labor Department said on Thursday. 

This potentially hinted at a pick-up in layoffs from tariffs, which weighed on the economy in the first quarter, ahead of Friday’s key nonfarm payrolls report.

The economy contracted last quarter for the first time in three years, swamped by a flood of imports as businesses tried to avoid duties from President Donald Trump’s tariffs.

(Ayushman Ojha contributed to this article.)

By Siyi Liu

SINGAPORE (Reuters) -Oil prices extended declines on Wednesday and were set for their largest monthly drop in more than three years as the global trade war eroded the outlook for fuel demand, while fears of mounting supply also weighed.

Brent crude futures fell by 75 cents, or 1.17%, to $63.50 per barrel by 0641 GMT. U.S. West Texas Intermediate crude futures dropped 79 cents, or 1.31%, to $59.63 a barrel.

Brent and WTI have lost 15% and 17% respectively so far this month, the biggest percentage drop since November 2021.

Both benchmarks slumped after U.S. President Donald Trump’s April 2 announcement of tariffs on all U.S. imports. They then sank further to four-year lows as China responded with its own levies against U.S. imports, stoking a trade war between the top two oil-consuming nations.

Trump’s tariffs on imports into the U.S. have made it probable the global economy will slip into recession this year, according to a Reuters poll.

China’s factory activity contracted at the fastest pace in 16 months in April, a factory survey showed on Wednesday.

Worries about demand amid the trade war have weighed on investor sentiment, said ANZ bank senior commodity strategist Daniel Hynes.

"There are also concerns that recent strength in U.S. economic data was only temporary, due to stockpiling ahead of the tariffs that now appears to be abating," he added.

U.S. consumer confidence slumped to a nearly five-year low in April on growing concerns over tariffs, data showed on Tuesday.

Recent signs of a de-escalation in the trade wars, including a pair of orders Trump signed on Tuesday to soften the blow of his auto tariffs, eased some jitters among global investors.

That said, analysts believe the oil market will stay under pressure as the Trump administration continues to prioritise lower oil prices to manage inflation.

Oil prices were also undermined by fears of mounting supply from the Organization of the Petroleum Exporting Countries and their allies, known as OPEC+.

Several OPEC+ members will suggest a ramp-up of output hikes for a second straight month in June, sources told Reuters last week. The group will meet on May 5 to discuss output plans.

On the supply front, {{8849|U.S. crcrude oil inventories rose by 3.8 million barrels last week, market sources said on Tuesday citing American Petroleum Institute data. [API/S]

U.S. government data on stockpiles is due at 10:30 a.m. ET (1430 GMT) on Wednesday. Analysts polled by Reuters expect, on average, an 400,000 barrel increase in U.S. crude oil stocks for last week. [EIA/S]

By Chen Aizhu and Trixie Yap

SINGAPORE (Reuters) -China’s used cooking oil (UCO) exports to the United States, its largest buyer, are set to plunge in coming months due to steep tariffs, forcing sellers to divert shipments to Europe and elsewhere, industry players said.

With Trump administration is now charging 125% import tariff on Chinese UCO from this month. Shipments to the U.S., valued at $1.1 billion last year, are tumbling with the last cargoes sailing around late March and early April before trade grinds to a halt, said three China-based UCO traders.

China’s UCO exports hit an all-time high last year at nearly 3 million metric tons or worth $2.64 billion, according to Chinese customs.

"For the time being, arbitrage to the U.S. is closed and we think it will remain so for the medium term," said Richard Dickinson, Shanghai-based head of trading Amarus Trading, one of the largest dealers of Chinese UCO.

"Some of the exports will be diverted to Europe and new markets in Asia such as Korea, Thailand, Malaysia and India."

At least four new Sustainable Aviation Fuel facilities, which use UCO as an ingredient and totalling at least 700,000 metric tons per year of production capacity, have started up or will begin operation by this year in Thailand, Malaysia and Japan, according to industry insiders.

Exports to the U.S. have fallen since last December as Beijing removed tax rebates for UCO exports and also due to the new U.S. clean fuel tax policy that discourages the use of imported UCO, and the latest tariffs only exacerbates the situation, a shipper of the fuel said.

Most Asian stock markets were little changed on Wednesday as investors digested a series of key economic indicators, chiefly weak factory activity data from Japan and China, and Australian CPI inflation.

Meanwhile, Indian stocks edged lower amid rising geopolitical tensions with Pakistan, while equities in South Korea fell amid heightened political unrest in the country.

Regional markets took few cues from a positive overnight close on Wall Street. Major U.S stock indexes closed with modest gains on Tuesday, while futures tied to these benchmark indexes fell in Asian trading on Wednesday as, globally investors awaited key PCE price index data and major corporate earnings due in the coming days.

Trump Tariffs slam China, Japan industrial activity

Fresh economic data from China and Japan revealed a slowdown in industrial activity, largely attributed to escalating U.S. tariffs under President Donald Trump’s administration. 

China’s official manufacturing Purchasing Managers’ Index (PMI) fell to 49.0 in April, down from 50.5 in March, indicating a contraction in factory activity. 

This decline marks the first contraction since December 2023 and is attributed to the intensifying trade war with the U.S., which has imposed a whopping 145% tariff on Chinese goods. 

The Caixin reading also reflected a sharp drop in overseas orders following Trump’s tariffs.

The downturn has prompted calls for economic stimulus as the impact of these tariffs becomes more evident. 

China’s Shanghai Composite was muted, while the Shanghai Shenzhen CSI 300 were also unchanged. Hong Kong’s Hang Seng edged 0.3% higher

Meanwhile, Japan’s industrial production decreased by 1.1% m-o-m in March, surpassing market expectations of a 0.5% drop. 

These reductions are linked to disrupted auto part supplies, a consequence of the U.S. imposing a 25% tariff on car and truck imports and a temporary 10% tariff on all Japanese goods. 

Japan’s Nikkei 225 index was largely muted while TOPIX rose 0.4%, as markets returned after a public holiday.

Australia Q1 CPI supports RBA rate cut bets

Data on Wednesday showed that Australian consumer price index inflation grew slightly more than expected in the first quarter, while underlying inflation fell back into the Reserve Bank of Australia’s target range of 2%-3%, supporting the case for a rate cut.

The RBA is expected to cut interest rates by 25 basis points at its next policy meeting on May 20.

Australia’s S&P/ASX 200 edged 0.3% higher.

Other Asian stock indexes only edged higher despite easing U.S. tariff tensions.

Nifty 50 down amid Indo-Pak tensions; KOSPI down on political unrest

India’s Nifty 50 fell 0.2% at open.

Pakistan’s Information Minister Attaullah Tarar stated on Wednesday that the country has reliable intelligence indicating India may carry out a military strike within the next 24 to 36 hours.

This development comes amid growing tensions between the two nuclear-armed neighbors, after India alleged that Pakistani elements were involved in last week’s attack that killed 26 people at a tourist site in Indian Kashmir.

Meanwhile, South Korea’s KOSPI declined after media reports showed that South Korean prosecutors were searching the private residence of ousted President Yoon Suk Yeol.

Yoon was ousted after he declared a martial law in South Korea in December last year.