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Global markets recover as tariff concerns ease

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US stocks rebound after early sell-off, ASX set to rise

The US stock market saw a dramatic recovery overnight after an early sell-off driven by new trade tariffs. The Dow Jones Industrial Average initially tumbled more than 650 points after President Trump announced a 25% tariff on imports from Canada and Mexico and a 10% tariff on Chinese goods. However, a temporary agreement between the US and Mexico helped ease concerns, allowing the Dow to recover most of its losses, closing down just 122 points at 44,421.

The S&P 500 fell 0.76 percent to just below the 6,000 mark, while the Nasdaq Composite dropped 1.2 percent, with heavy selling in tech stocks. Apple lost 3 percent, while Tesla declined 5 percent as investors reacted to uncertainty over trade negotiations. Meanwhile, volatility surged early but later eased, as market sentiment stabilized.

The Mexican stock market rebounded, with the iShares MSCI Mexico ETF rising over 2 percent, after Mexico’s President Claudia Sheinbaum announced a deal with Trump to pause tariffs for a month. Trump later confirmed the agreement, noting that negotiations would continue, with Mexico committing 10,000 soldiers to border enforcement.

Looking at Australia, the ASX is set to rise at the open, following the US market’s late recovery. The SPI futures are pointing to a 39 point or 0.47% rise.

One Australian dollar at 8:30am was buying 61.92 US cents, 60.1 Euro cents and 95.85 Yen.

While global trade uncertainty remains a risk, expectations of further negotiations with Mexico and China have helped limit the broader sell-off.

The market will be watching for any further updates on US-China tariff talks, as Trump signaled discussions could take place within the next 24 hours.

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