Markets

Published on
13/06/2025 – 7:57 GMT+2

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European indexes prepared to take a hit on Friday as Asian markets dropped on news that Israel had attacked Iran’s capital. The strikes came amid the ramping up of tensions over Tehran’s rapidly advancing nuclear program.

Oil prices, on the other hand, soared — linked to concerns that the conflict could restrict supply.

US benchmark crude oil rose 8.8%, to just under $74 per barrel. Brent crude, the international standard, increased by 8.28% to $75.10 per barrel.

In share trading, Tokyo’s Nikkei 225 fell 1.2% to 37,719.82 while the Kospi in Seoul edged 1.4% lower to 2,879.08.

Hong Kong’s Hang Seng retreated 0.9% to 23,831.85 and the Shanghai Composite Index lost 0.8% to 3,375.16.

Australia’s S&P/ASX 200 drifted 0.3% lower to 8,535.90.

An Israeli attack on Iran is in “our top ten of global risks”, but “Asian markets are expected to recover quickly as they have relatively limited exposure to the conflict and growing ties to unaffected Saudi Arabia and the UAE”, said Xu Tiachen of The Economist Intelligence.

Following the strikes on Iran, S&P 500 futures dropped 1.5%, Nasdaq 100 futures fell 1.7% and Dow Jones Industrial Average futures fell 1.4% by around 1.30am ET.

On Thursday, US stock indexes had ticked higher following another encouraging update on inflation across the country.

The S&P 500 rose 0.4% to 6,045.26. The Dow Jones Industrial Average added 0.2% to 42,967.62, and the Nasdaq Composite gained 0.2% to 19,662.48.

Oracle pushed upward on the market after jumping 13.3%. The tech giant delivered stronger profit and revenue for the latest quarter than analysts expected, and CEO Safra Catz said it expects revenue growth “will be dramatically higher” in its upcoming fiscal year.

That helped offset a 4.8% loss for Boeing after Air India said a London-bound flight crashed shortly after taking off from Ahmedabad airport on Thursday with 242 passengers and crew onboard. The Boeing 787 Dreamliner crashed into a residential area near the airport five minutes after taking off.

Stocks broadly got some help from easing Treasury yields in the bond market following the latest update on inflation. Thursday’s update said inflation at the wholesale level wasn’t as bad last month as economists expected.

Wall Street took it as a signal that the Federal Reserve will have more leeway to cut interest rates later this year in order to give the economy a boost.

The Fed’s next meeting on interest rates is scheduled for next week, but the nearly unanimous expectation on Wall Street is that officials won’t cut.

In currency trading early Friday, the US dollar rose slightly to 143,67 Japanese yen. The euro fell about 0.5% against the US dollar, to $1.1528.

Published on
10/06/2025 – 7:36 GMT+2

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Asian shares were marginally higher on Tuesday as investors kept an eye on US-China trade talks that might help stave off a recession.

Tokyo’s Nikkei 225 gained 0.9% to 38,445.68, while the Kospi in South Korea jumped 0.3% to 2,865.12.

Hong Kong’s Hang Seng edged 0.3% higher, to 24,261.26 and the Shanghai Composite index was up 0.1% at 3,403.52. In Taiwan, the Taiex surged 2.1% to 22.253,46.

Australia’s S&P/ASX 200 advanced just less than 0.9% to 8.588,10.

On Monday, the S&P 500 edged up just 0.1% and at 6,005.88 is within 2.3% of its record set in February. The Dow Jones Industrial Average slipped by 1 point, which is well below 0.1%, to 42,761.76.

The Nasdaq composite added 0.3% to 19,591.24.

A second day of talks between the US and China was planned after the two global powers met in London for negotiations.

The hope is that they can eventually reach a deal to reduce painfully high tariffs against each other. Most of the tariff hikes imposed since US President Donald Trump escalated his trade war have been paused to allow trade in everything from tiny tech gadgets to enormous machinery.

Hopes that President Donald Trump will lower his tariffs after reaching trade deals with countries around the world have helped the S&P 500 win back gains after it dropped roughly 20% from its record two months ago. The index is back above where it was when Trump shocked financial markets in April with his wide-ranging tariff announcement on so-called “Liberation Day”.

Some of the market’s biggest moves came from the announcement of big buyout deals. Qualcomm rallied 4.1% after saying it agreed to buy Alphawave Semi in a deal valued at $2.4bn (€2.1bn). IonQ, meanwhile, rose 2.7% after the quantum computing and networking company said it agreed to purchase Oxford Ionics for nearly $1.08bn (€947.1mn).

On the losing side of Wall Street was Warner Bros. Discovery, which flipped from a big early gain to a loss of 3% after saying it would split into two companies. One will get Warner Bros. Television, HBO Max and other studio brands, while the other will hold onto CNN, TNT Sports and other entertainment, sports and news television brands around the world, along with some digital products.

Tesla recovered some of its sharp, recent drop. The electric vehicle company tumbled last week as Elon Musk’s relationship with Trump broke apart, and it rose 4.6% on Monday after flipping between gains and losses earlier in the day.

The frayed relationship could end up damaging Musk’s other companies that get contracts from the US government, such as SpaceX. Rocket Lab, a space company that could pick up business at SpaceX’s expense, rose 2.5%.

In the bond market, the yield on the 10-year Treasury eased to 4.48% from 4.51% late Friday. It fell after a survey by the Federal Reserve Bank of New York found that consumers’ expectations for coming inflation eased slightly in May.

Economists expect a report due on Wednesday to show that inflation across the country accelerated last month to 2.5% from 2.3%.

The Federal Reserve has been keeping its main interest rate steady as it waits to assess the inflationary effects of Trump’s tariffs. A persistent increase in inflation expectations among US households could drive behaviour that creates a vicious cycle that only worsens inflation.

In other dealings early on Tuesday, US benchmark crude oil picked up 31 cents to $65.45 per barrel. Brent crude, the international standard, also gained 31 cents, to $67.35.

The dollar rose to 144.93 Japanese yen from 144.61 yen. The euro slipped to $1.1399 from $1.1421.

Published on
06/06/2025 – 6:42 GMT+2

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In three hours on Thursday, shares in Elon Musk’s electric vehicle company plunged by more than 14% in a stunning wipeout, as investors dumped their holdings amid a bitter war of words between the president and the world’s richest man.

By the end of the trading day, $150 billion (€139bn) of Tesla’s market value had been erased — more than what it would take to buy all the shares of Starbucks and hundreds of other big publicly traded US companies.

The disagreement started over the president’s budget bill, then quickly turned nasty after Musk said that Trump wouldn’t have been elected without his help. Trump then implied that he may turn the federal government against Musk’s companies, including Tesla and SpaceX.

“The easiest way to save money in our Budget, Billions and Billions of Dollars, is to terminate Elon’s Governmental Subsidies and Contracts,” Trump wrote on his social messaging service Truth Social. “I was always surprised that Biden didn’t do it!”

The drop on Thursday partially reversed a big run-up in the eight weeks since Musk confirmed that Tesla would be testing an autonomous, driverless “robotaxi” service in Austin, Texas, this month.

Investors fear Trump might not be in such a rush to usher in a future of self-driving cars in the US, and that could hit Tesla.

“The whole goal of robotaxis is to have them in 20 or 25 cities next year,” Wedbush Securities analyst Dan Ives, said. “If you start to heighten the regulatory environment, that could delay that path.”

He added that there’s a fear Trump is not going to play ‘Mr Nice Guy’ anymore.

However, Trump’s threat to cut government contracts could be aimed more at another of Musk’s businesses, SpaceX. The privately held rocket company has received billions of dollars for sending astronauts and cargo to the International Space Station, providing launches and doing other work for NASA. The company is currently racing to develop a mega-rocket for the space agency to send astronauts to the Moon next year.

A subsidiary of SpaceX, the satellite internet company Starlink, appears to also have benefited from Musk’s once-close relationship with the president.

On a trip with Trump to the Middle East last month, Musk announced that Saudi Arabia had approved Starlink for aviation and maritime use. Though its not clear how much politics has played a role, a string of other recent deals in Bangladesh, Pakistan, India and elsewhere has followed, as Trump has threatened tariffs and sent diplomats scrambling to please the president.

One measure of SpaceX’s success: A private financing round followed by a private sale of shares in recent months reportedly valued it at $350 billion (around €325bn), up from an estimated $210 billion (about €195.3bn) a year ago.

Now all that is possibly in danger. Tesla shares got an even bigger lift from Musk’s close relationship with Trump, initially at least.

After the presidential election in November, investors rushed into the stock, adding more than $450 billion (€418.5bn) to its value in a few weeks. The belief was that the company would see big gains as Trump eased regulatory oversight of Tesla. They also bet that the new administration would embrace Musk’s plans for millions of cars on US roads without drivers behind the wheel.

After hitting an all-time high on 17 December, the shares retreated as Musk’s time as head of a government cost-cutting group led to boycotts and a hit to Tesla’s reputation. They’ve recently popped higher again after Musk vowed to focus more on Tesla and its upcoming driverless taxi launch.

Now investors aren’t so sure, a worry that has translated into big paper losses in Tesla stock held by Musk personally.

Published on
02/06/2025 – 13:29 GMT+2

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At the time of writing (13:05 CEST), all major European indexes were in the red after China said the US “severely violated” the terms of their recent trade agreement. Market participants also considered the impact of US President Donald Trump’s plan to double current tariffs on steel and aluminium from 25% to 50% from this Wednesday.

The EURO STOXX 50 was down 0.68%, Germany’s DAX fell 0.48%, while France’s CAC 40 declined 0.63%.

“Donald Trump has upset markets once again,” Russ Mould, investment director at AJ Bell, said in an email note sent to Euronews.

“Doubling import taxes on steel and aluminium, and aggravating China once again, mean we face a situation where uncertainty prevails. Trump’s continuous moving of the goal posts is frustrating for businesses, governments, consumers and investors.

“Equity markets were down across Europe and Asia, with futures prices implying a similar pattern when Wall Street opens for trading on Monday. Unsurprisingly, gold got a boost as investors returned to safe-haven assets.”

US markets end May on flat note

Meanwhile, US markets ended May on a flat note, although for the month as a whole each of the main indices rose strongly following hopes of tariff reconciliations.

“Such optimism will face an immediate challenge as June begins, with comments over the weekend keeping the aggressive rhetoric in place. The latest broadsides from the White House were primarily directed at China and the EU, with both threatening a response in kind to any further tariff hikes,” Richard Hunter, head of markets at Interactive Investor, said in an email note to Euronews.

However, he noted, back on the ground, there were some promising economic signs with the Federal Reserve’s preferred measure of inflation, the Personal Consumption Expenditures index coming in lower than expected and with a consumer sentiment index showing higher than had been feared.

“However, such respite could prove short-lived as the latter was largely predicated on an apparent softening of hostilities between the US and China in the latter part of the month, which has since evaporated. There will be a further signal on the state of the economy at the end of the week, with non-farm payrolls expected to show that 130,000 jobs will have been added in May compared to 177,000 the previous month and that the 4.2% unemployment rate will remain unchanged.

“In the meantime, US markets have repaired much of the damage wrought over the last few months although sentiment remains fragile. The Dow Jones and Nasdaq are down by 0.6% and 1% respectively in the year-to-date, while the 0.5% gain for the benchmark S&P500 has in part been driven by a resurgence of the mega cap technology trade,” Hunter said.

Asia markets under pressure

In addition to contending with the weekend comments, Asian markets fell foul of geopolitical uncertainty following the latest Russia-Ukraine developments, with the Hang Seng under pressure based on the renewed likely tariff hikes on aluminium and steel.

“Mainland China was closed for a public holiday, which could leave some losses being stored up ahead of its reopening, likely exacerbated by a report which showed a further contraction in factory activity over the last month,” Hunter added.

By Tina Teng

Published on
30/05/2025 – 8:03 GMT+2

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A Federal appeals court temporarily blocked a ruling from the Court of International Trade that barred most of the Trump administration’s sweeping tariffs on global trading partners. The legal development reignited uncertainty, sparking renewed selloffs in US stock markets and dragged the US dollar sharply lower from its intraday high.

The decision provides the White House with additional time to defend the legality of the president’s efforts to reshape global trade relations. Federal officials signalled that the same level of import levies could be reintroduced under alternative legal authorities, although enacting tariffs via other sections of the Trade Act could take several months.

“I can assure the American people that the Trump tariff agenda is alive, well, healthy and will be implemented to protect you, to save your jobs and your factories, and to stop shipping foreign wealth — our wealth — into foreign hands,” Peter Navarro, Trump’s top trade adviser, said on Thursday.

Trump had invoked the International Emergency Economic Powers Act (IEEPA) to impose the so-called reciprocal tariffs announced in early April. However, on Wednesday, the trade court ruled that the president does not have the authority to impose such broad levies under the IEEPA.

“America cannot function if President Trump — or any other president, for that matter — has their sensitive diplomatic or trade negotiations railroaded by activist judges,” said White House Press Secretary Karoline Leavitt. “Ultimately, the Supreme Court must put an end to this for the sake of our Constitution and our country.”

Wall Street pares early gains

The US stock markets initially jumped on the original court ruling, alongside positive quarterly earnings results from Nvidia. However, major indices gave up early gains despite a higher close on Thursday. During Friday’s Asian session, US stock futures continued to fall as risk-off sentiment prevailed.

As of 4 am CEST, Dow Jones Industrial Average futures were down 0.08%, while the S&P 500 and Nasdaq 100 futures both declined 0.26%.

European markets are also expected to open lower, according to futures pricing. The Euro Stoxx 50 was down 0.19%, and Germany’s DAX slipped 0.15%. German equities extended losses for a second consecutive day on Thursday, following a record high on Tuesday. Investors will be closely watching the progress of US-EU trade talks, though the legal battle surrounding the Trump administration’s tariffs is adding complexity to the outlook.

Asian equity markets also traded mostly lower on Friday. Hong Kong’s Hang Seng Index fell 1.4%, Japan’s Nikkei 225 lost 1.39%, and South Korea’s Kospi dropped 0.61%. Australia’s ASX 200 was flat as of 3:10 am CEST.

The US dollar tumbles as haven assets rise

The latest court developments have once again dented investor confidence in US assets, particularly the dollar. Yields on US government bonds initially jumped to 4.5% but later pulled back to 4.42% as Treasury prices came under renewed pressure.

Meanwhile, haven assets have rallied. Gold jumped, and the euro, the Swiss franc, and the Japanese yen all strengthened significantly. The euro rebounded sharply from an intraday low against the dollar on Thursday after the tariff ruling was paused. The EUR/USD pair fell as low as 1.1210 before surging to 1.1353 as of 3:11 am CEST on Friday. Gold futures also swung higher, climbing to $3,321 per ounce from an intraday low of $3,269 on Thursday.

By Tina Teng

Published on
28/05/2025 – 7:29 GMT+2

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European stock markets extended their rally for a second consecutive trading day on Tuesday as concerns over escalating US-EU trade tensions eased. Germany’s DAX rose 0.82% to 24,226.49, marking a fresh record high, while the Euro Stoxx 600 climbed 0.33% to 552.33, edging within 0.2% of its March peak.

US President Donald Trump expressed optimism toward the trade negotiations. “I have just been informed that the EU has called to quickly establish meeting dates,” he wrote in the Truth Social, “This is a positive event, and I hope that they will, FINALLY, like my same demand to China, open up the European Nations for Trade with the United States of America. They will BOTH be very happy, and successful, if they do!!!”

The US president’s comments also lifted Wall Street, with the Dow Jones Industrial Average up 1.78%, the S&P 500 rising 2.05%, and the Nasdaq composite surging 2.47%.

On Sunday, Trump announced he had agreed to postpone the implementation of a 50% tariff on EU imports until 9 July, following a phone call with European Commission President Ursula von der Leyen. During the call, von der Leyen expressed the EU’s readiness “to advance talks swiftly and decisively” in a bid to avert further trade escalation.

Trump had initially announced 20% “reciprocal tariffs” on EU goods on 2 April before reducing the rate to 10% for 90 days. However, last Friday, he threatened to impose a 50% tariff from 1 June, citing frustration over the pace of negotiations and disagreement among EU member states.

While specific meeting dates remain absent publicly, EU Trade Commissioner Maroš Šefčovič is expected to meet his US counterpart in Paris next Tuesday during the Organisation for Economic Co-operation and Development (OECD) summit. Talks are expected to focus on removing bilateral tariffs on industrial goods and addressing US import levies on steel, aluminium, semiconductors, automobiles, and pharmaceutical products, according to sources familiar with the matter.

Earlier this month, the EU postponed a proposed package of retaliatory tariffs on up to €95 billion worth of US imports, including wine, spirits, aircraft, auto parts, electrical products, and more.

Defence and banking stocks lead gains

The DAX is up 22% year-to-date, making it the top performer among major global indices. The index had pulled back sharply in April following Trump’s announcement of the reciprocal tariffs but has consistently rebounded on signs of de-escalation in trade tensions.

In sectors, the defence and banking stocks led the broad gains, underpinned by optimism over Germany’s fiscal and defence spending reforms. In March, Germany’s Friedrich Merz announced plans to increase defence spending beyond 1% of GDP and a €500 billion special fund for infrastructure investment. The landmark fiscal package particularly lifted sentiment in European defence and industrial stocks, with Rheinmetall AG shares soaring 207% so far this year, repeatedly hitting new highs.

Meanwhile, European banking stocks have been supported by the European Central Bank’s accommodative monetary policy stance, which has bolstered investment banking income and lending activity. Shares of Deutsche Bank and Commerzbank soared 50% and 75% respectively this year.

The euro retreats

Despite the bullish momentum in equities, the euro weakened against the US dollar, as the greenback staged a strong rebound following Trump’s decision to delay tariffs — a move that mirrored previous dollar rallies during the US-China trade talks.

The EUR/USD pair fell to just above 1.13 during Wednesday’s Asian session, retreating from over 1.14 on Monday, as markets priced in renewed optimism over US-EU trade negotiations and an improved US economic outlook.

By Tina Teng

Published on
23/05/2025 – 8:14 GMT+2

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Crude oil prices fell for a third consecutive trading day on Thursday ahead of the US-Iran nuclear talks. Traders are growing concerned about the possible return of oil supply from Iran, which holds around one-third of the world’s oil reserves.

Adding to the pressure, a Bloomberg report stated that the Organisation of the Petroleum Exporting Countries and its allies (OPEC+) is considering a third consecutive production hike in July, compounding fears of an oversupplied market.

Oil prices continued to decline during Friday’s Asian session. As of 4:40 am CEST, Brent futures were down 0.59% to $64.06 per barrel, while West Texas Intermediate (WTI) futures fell 0.6% to $60.83 per barrel—both touching their lowest levels in over a week.

Potential oversupply overshadows geopolitical tensions

Crude prices have experienced notable volatility in recent weeks as market participants weigh rising geopolitical tensions against mounting supply from major oil-producing nations. Broader macroeconomic factors—such as easing US-China trade tensions and renewed selling in US Treasuries—have also been influencing oil market movements.

Earlier in the week, prices briefly spiked following a CNN report that Israel was preparing to launch strikes against Iran’s nuclear facilities, citing intelligence from US sources. However, the rally proved short-lived, with analysts suggesting the warning may have been a strategic move by the US to exert pressure on Iran ahead of the nuclear negotiations.

The geopolitical boost was quickly overshadowed on Wednesday by data showing a surge in US crude inventories. According to the Energy Information Administration (EIA), US oil stockpiles rose to 443.2 million barrels in the week ending 16 May—the highest level since July 2024. The report also indicated that net US crude imports had increased for a third consecutive week, while domestic demand remained weaker than expected.

OPEC+ may accelerate production hike

News about OPEC+’s potential acceleration in production hike sent the oil price down further on Thursday. The oil production cartel is reportedly considering hiking crude output by 411,000 barrels per day (bpd) in July. The decision is yet to be finalised on 1 June when the group holds the next meeting.

The group, which accounts for around 40% of global oil supply, has jointly reduced production by approximately 2.2 million bpd in 2023. The quicker-than-expected phased rollback began with a 135,000 bpd increase in April, tripling to 411,000 bpd in May and June. The acceleration is seen as a punitive measure against members which failed to comply with agreed production quotas, with Kazakhstan and Iraq identified as recent overproducers.

Crude prices have consistently fallen following OPEC+ announcements of larger-than-expected production increases in both April and May. However, the potential July decision may already be priced in by markets—unless the group surprises traders with an even more aggressive supply boost.

Demand outlook remains weak

The demand outlook remains fragile amid ongoing concerns over slowing global growth, particularly driven by the US tariffs. Crude prices had previously dropped to a four-year low on 9 April and again on 5 May. The oil market rebounded following the US and China’s trade talks earlier this month, when the world’s two largest economies reached an agreement to pause high tariffs on each other for 90 days.

While near-term pressure remains supply-driven, there is cautious optimism that a sustained recovery in market sentiment, driven by further progress in US tariff negotiations, could support a rebound in oil demand.

“While the immediate pressure comes from the supply side, I believe that in the longer term, further progress on US tariff negotiations with key partners could revive demand and offer more meaningful support for oil,” Dilin Wu, a research strategist at Pepperstone Australia, said.

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Following a broad weekly rally on Wall Street amid a de-escalation in the US-China trade war, risk-off sentiment once again prevailed in global markets following a major downgrade of US credit ratings by Moody’s. Global equity indices fell during Monday’s Asian session as sell-offs in US assets resumed, with US stock futures, the dollar, and government bonds all declining.

Moody’s downgrades US credit ratings

On Friday, Moody’s Ratings, a major American credit rating agency, downgraded the “US long-term issuer and senior unsecured ratings” to Aa1 from the top-tier Aaa due to mounting concerns over rising government debt and widening fiscal deficits.

The agency stated: “Over more than a decade, US federal debt has risen sharply due to continuous fiscal deficits. During that time, federal spending has increased while tax cuts have reduced government revenues. As deficits and debt have grown, and interest rates have risen, interest payments on government debt have increased markedly.”

Moody’s downgrade followed similar moves by rival agencies: Standard & Poor’s cut its US sovereign credit rating to AA+ in 2011, and Fitch Ratings made the same downgrade in 2023.

The decision led to a rise in US government bond yields as investors demanded a higher premium to compensate for perceived risks. The 10-year Treasury yield rose by 5 basis points (1 basis point = 0.01 percentage point) to 4.48% on Friday, climbing further to 4.51% during Monday’s Asian session. The downgrade also appeared to dampen investor appetite for other US assets, including equities and the dollar.

Moody’s expects federal budget flexibility to remain “limited” without adjustments to taxation and government spending. The agency projected that the US deficit would expand by approximately $4 trillion (€3.58 trillion) over the next decade if the 2017 Tax Cuts and Jobs Act is extended. “Federal interest payments are likely to absorb around 30% of revenue by 2035, up from about 18% in 2024 and 9% in 2021,” Moody’s added.

“It does speak to a level of market risk in US debt, which is to say that the value of US bonds could be compromised if the economy can no longer run at the growth rates necessary to service the government’s liabilities,” Kyle Rodda, senior market analyst at Capital.com in Australia, said.

Risk-off sentiment prevails

US equity futures fell sharply during Monday’s Asian session following Moody’s downgrade. As of 4:42 am CEST, futures on the Dow Jones Industrial Average were down 0.65%, the S&P 500 dropped 0.92%, and the Nasdaq Composite declined by 1.22%.

Asian equities also came under pressure amid the risk-off tone. Japan’s Nikkei 225 dropped 0.66%, Australia’s ASX 200 declined 0.46%, and Hong Kong’s Hang Seng Index slid 0.56% during the same period.

The ripple effect is expected to spill into European markets, though major indices such as the Euro Stoxx 600 and the DAX were set to open flat.

The US dollar also weakened against other G10 currencies, particularly safe-haven currencies including the euro, the Japanese yen, and the Swiss franc. Gold prices rose amid increased haven demand, although the yellow metal pulled back from an intraday high, likely due to pressure from rising US bond yields. Gold futures initially surged over 1% before retreating and were 0.8% higher, trading at $3,213 per ounce as of 4:12 am CEST.

Despite market jitters, Rodda believes the impact of Moody’s move will be short-lived. “I don’t think it will have a lasting impact,” he said, although he views the downgrade as “a reminder of the very loose fiscal policy the US is running and the structural problems related to US public finance.”

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Malevolent trading practices aren’t new. Struggles against insider trading, as well as different forms of market manipulation, represent a long-running battle for regulators.

In recent years — however — experts have been warning of new threats to our financial systems. Developments in AI mean that automated trading bots are not only smarter, but they’re more independent too. While basic algorithms respond to programmed commands, new bots are able to learn from experience, quickly synthesise vast amounts of information, and act autonomously when making trades.

According to academics, one risk scenario involves collaboration between AI bots. Just imagine: hundreds of AI-driven social media profiles begin to pop up online, weaving narratives about certain companies. The information spread isn’t necessarily fake, but may just be the amplification of existing news. In response, real social media users start to react, highlighting the bots’ chosen message.

As the market is tipped by the crafted narrative, one investor’s roboadvisor rakes in profits, having coordinated with the gossiping bots. Other investors, who didn’t have the insider information, lose out by badly timing the market. The problem is, the investor profiting may not even be aware of the scheme. This means that charges of market manipulation can’t necessarily be effective, even if authorities can see that a trader has benefitted from distortive practices.

Social platforms are changing trading

Alessio Azzutti, assistant professor in law & technology (FinTech) at the University of Glasgow, told Euronews that the above scenario is still a hypothesis — as there’s not enough evidence to prove it’s happening. Even so, he explains that similar, less sophisticated schemes are taking place, particularly in “crypto asset markets and decentralised finance markets”.

“Malicious actors… can be very active on social media platforms and messaging platforms such as Telegram, where they may encourage members to invest their money in DeFi or in a given crypto asset, to suit themselves,” Azzutti explained.

“We can observe the direct activity of human malicious actors but also those who deploy AI bots.”

He added that the agents spreading misinformation may not necessarily be very sophisticated, but they still have the power to “pollute chats through fake news to mislead retail investors”.

“And so the question is, if a layman, if a youngster on his own in his home office is able to achieve these types of manipulations, what are the limits for the bigger players to achieve the same effect, in even more sophisticated markets?”

The way that market information now spreads online, in a widespread, rapid, and uncoordinated fashion, is also fostering different types of trading. Retail investors are more likely to follow crazes, rather than relying on their own analysis, which can destabilise the market and potentially be exploited by AI bots.

The widely-cited GameStop saga is a good example of herd trading, when users on a Reddit forum decided to buy up stock in the video game company en masse. Big hedge funds were betting that the price would fall, and subsequently lost out when it skyrocketed. Many experts say this wasn’t a case of collusion as no official agreement was created.

A spokesperson from ESMA, the European Securities and Markets Authority, told Euronews that the potential for AI bots to manipulate markets and profit off the movements is “a realistic concern”, although they stressed that they don’t have “specific information or statistics on this already happening”.

“These risks are further intensified by the role of social media, which can act as a rapid transmission channel for false or misleading narratives that influence market dynamics. A key issue is the degree of human control over these systems, as traditional oversight mechanisms may be insufficient,” said the spokesperson.

ESMA highlighted that it was “actively monitoring” AI developments.

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Is regulation ready?

One challenge for regulators is that collaboration between AI agents can’t be easily traced.

“They’re not sending emails, they’re not meeting with each other. They just learn over time the best strategy and so the traditional way to detect collusion doesn’t work with AI,” Itay Goldstein, professor of finance and economy at the Wharton School of the University of Pennsylvania, told Euronews.

“Regulation has to step up and find new strategies to deal with that,” he argued, adding that there is a lack of reliable data on exactly how traders are using AI.

Filippo Annunziata, professor of financial markets and banking legislation at Bocconi University, told Euronews that the current EU rules “shouldn’t be revised”, referring to the Regulation on Market Abuse (MAR) and the Markets in Financial Instruments Directive II (MiFID II).

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Even so, he argued that “supervisors need to be equipped with more sophisticated tools for identifying possible market manipulation”.

He added:  “I even suggest that we ask people who develop AI tools for trading on markets and so on to include circuit breakers in these AI tools. This would force it to stop even before the risk of manipulation occurs.”

In terms of the current legal framework, there’s also the issue of responsibility when an AI agent acts in a malicious way, independent of human intent.

This is especially relevant in the case of so-called black box trading, where a bot executes trades without revealing its inner workings. To tackle this, Some experts believe that AI should be designed to be more transparent, so that regulators can understand the rationale behind decisions.

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Another idea is to create new laws around liability, so that actors responsible for AI deployment could be held responsible for market manipulation. This could apply in cases where they didn’t intend to mislead investors.

“It’s a bit like the tortoise and the hare,” said Annunziata.

“Supervisors tend to be tortoises, but manipulators that use algorithms are hares, and it’s difficult to catch up with them.”

If you voted for Donald Trump last November because you believed he’d increase economic freedom, it’s safe to say you were fooled. Following a reckless tariff barrage, the White House and its allies are preparing a new wave of tax-code gimmickry that has more in common with progressive social engineering than pro-growth reform. And don’t forget a fiscal recklessness that mirrors the mistakes of the left.

Defend these policies if you like, but let’s be clear: The administration shows no coherent commitment to free-market principles and is in fact actively undermining them. Its approach is better described as central planning disguised as economic nationalism.

This week’s example is an executive-order attempt at prescription-drug price control, similar to Democrats’ past proposals. If implemented it would inevitably reduce pharmaceutical R&D and innovation.

Tariffs remain the administration’s most visible economic sin after Trump launched the most extreme escalation of protectionism since the infamous Smoot-Hawley Act of 1930. Unlike the 1930s, however, today’s economy is deeply integrated with global supply chains, making the damage extensive and far more immediate. Tariffs are only nominally imposed on imports. Ultimately, they’re taxes on American consumers, workers and businesses.

The president has made it clear that he’s fine with limiting consumer choice, blithely telling parents they might have to “settle” for two dolls instead of 30 for their children. Smug pronouncements about how much we should shop (not much) or which sectors we should work in (manufacturing) are economic authoritarianism.

They’re also indicative of a deeper government rot. Policymaking is now done by executive orders as comatose congressional Republicans, like some Biden-era Democrats, allow the president to rule as if he’s a monarch.

A full-throated, assertive Congress would remind any president that manufacturing jobs were mostly lost to technologies that also create jobs and opportunity in members’ districts. Prosperity increases only through innovation and competition and isn’t restored by dragging people backward into lower-productivity jobs.

Now, even Trump’s tax agenda — once considered a bright spot by many free-market advocates — is being corrupted. Instead of championing the broad-based, pro-growth reforms we’d hoped for, the administration is doubling down on gimmickry: exempting tips and overtime pay, expanding child tax credits and entertaining the idea of raising top marginal tax rates.

These moves might poll well, but they’re unprincipled and unproductive. They undermine the 2017 Tax Cuts and Jobs Act, which aimed (however imperfectly) to simplify the code and incentivize growth, and not to micromanage worker and household behavior through the Internal Revenue Service.

And then there are the administration’s misleading, populist talking points about raising taxes on the rich to reduce taxes on lower- and middle-income workers. The U.S. income-tax system is already one of the most progressive in the developed world. According to the latest IRS data, the top 1% of earners pay more in federal income taxes than the bottom 90% combined. These high earners provide 40% of federal income-tax revenue; the bottom half of earners make up only 3% of that revenue. Thankfully, the House of Representatives steered away from that mistake in its bill.

Meanwhile, some Republican legislators are pushing to extend the 2017 tax cuts without meaningful offsets, setting the stage for a debt-fueled disaster. As noted by Scott Hodge, formerly the longtime president of the Tax Foundation, the GOP’s proposed cuts could add more than $5.8 trillion to the debt over a decade. That’s nearly three times the cost of the 2021 American Rescue Plan, which many Republicans rightly criticized for fueling inflation and fiscal instability.

To be clear: Pro-growth tax reform is essential. But not every tax cut is pro-growth, and no tax cut justifies further fiscal deterioration. Extending the 2017 cuts, which I generally support, shouldn’t be confused with true tax reform.

Some of the provisions being floated — expanded credits, exclusions for tips and overtime, rolling back the state and local tax (SALT) deduction cap — are not growth policies. They are wealth redistribution run through the tax code, indistinguishable in substance from the kind of demand-side, Keynesian stimulus Republicans once decried.

Hodge notes that these measures would do more to mimic the American Rescue Plan than to reverse its pricey mistakes. And with the Federal Reserve still fighting inflation, adding trillions in unfunded liabilities to the national ledger is profoundly irresponsible.

None of this should surprise anyone paying attention. This administration is packed with advisors and surrogates who glorify union power, rail against globalization and scoff at the very idea of limited government. Some sound more like Bernie Sanders than Milton Friedman. Whether it’s directing industrial policy or distorting the tax code to reward their favorite behaviors, they are hostile to the competition and liberty of the free market.

Sadly, that hostility has real consequences: higher prices, greater economic uncertainty, sluggish investment and fewer opportunities for middle- and lower-class families.

Veronique de Rugy is a senior research fellow at the Mercatus Center at George Mason University. This article was produced in collaboration with Creators Syndicate.

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Speaking after the trade talks, US President Donald Trump told reporters at the White House on Monday: “China will also suspend and remove all of its non-monetary barriers. They’ve agreed to do that,” he said. “It’s going to take a while to paper it. You know, that’s not the easiest thing to paper,” he added.

In early April, China imposed rare earth export restrictions on the US as a major non-tariff countermeasure in response to Trump’s reciprocal tariffs. The export controls affected seven critical minerals, on which the US heavily relies. These minerals are essential components in the manufacture of electric vehicles and electronic devices.

Trump’s remarks suggest that whether China will suspend or remove its export controls on these key minerals will be a central term in the negotiations. The removal or suspension of the controls could further bolster optimism surrounding a de-escalation of trade tensions.

On Monday, the world’s two largest economies reached an agreement to pause tariffs for 90 days. The US will reduce tariffs on China to 30% from 145%, while China will lower import levies on US goods to 10% from 125%.

Stock market rally loses steam

The broad-based market rally showed signs of retreat during Tuesday’s Asian session, indicating investor caution over the progress of US-China negotiations. Although both sides agreed to establish a mechanism for further discussions following the weekend’s talks, no specific dates have yet been set for future meetings.

US stock futures declined, pointing to a lower open. As of 4:50 am CEST, the Dow Jones Industrial Average fell 0.25%, the S&P 500 dropped 0.38%, and the Nasdaq Composite slid 0.47%. By contrast, European major index futures were more resilient, with the Euro Stoxx 600 slipping 0.17%, the DAX flat, and the FTSE 100 falling 0.23%.

Markets are awaiting further details of the agreement, particularly regarding China’s non-tariff countermeasures. Investors are also concerned about whether a comprehensive trade deal can be secured between the two nations after the 90-day pause.

“The critical issue from here is solidifying trade deals and ensuring the reduced tariffs don’t lapse after 90 days,” wrote Kyle Rodda, a senior market analyst at Capital.com, Australia, in an email. He added that markets would also look to see whether the US can achieve trade deals with other partners. “The markets will also want to see the US maintain this momentum and nut out deals with its other trading partners. Should that happen, the recovery in equities and the dollar ought to continue,” he said.

Euro rebounds from month-low

The US dollar weakened slightly against other major G10 currencies during the early Asian session. The EUR/USD pair rebounded to above 1.11 after falling to as low as 1.1065 on Monday – its lowest since 10 April.

The euro was seen as a major haven asset in April as the trade war heightened fears of a global economic recession. The common currency surged against the greenback last month to its highest level since November 2021. However, the euro’s rally could reverse course if future US-China negotiations lead to further de-escalation of trade tensions.

Investors appear to be seeking bargains in US assets amid an easing of risk-off sentiment. Despite the trade war, the impact on the US economy is expected to remain limited thus far. The market sell-off has been driven more by deteriorating sentiment than by any materialised downturn.

Markets will also turn their attention to the US Consumer Price Index (CPI) for April, due for release on Wednesday. Sticky inflation may further drive up the dollar, thereby putting pressure on the euro. Markets expect the Federal Reserve to reduce interest rates twice this year in response to tariff-driven inflationary risks. Meanwhile, the European Central Bank is also expected to continue its rate-cutting cycle on economic grounds, albeit on a meeting-by-meeting basis.