U.S.-China Tariff Rollback Exceeds Expectations, Risk Assets Rally

On Tuesday, the two nations issued a joint statement from Geneva announcing a substantial rollback of the additional tariffs imposed on April 2. A combined 91% of the tariffs will be lifted, with 24% granted exemptions within 90 days. Although the new tariff framework has yet to take effect, the unexpectedly dovish outcome sparked strong risk-on sentiment across global markets.

(Chart 1: S&P500 Heatmap | Source: FINVIZ)

All four major U.S. indices closed higher, with the Philadelphia Semiconductor Index (SOX) surging 7.04%, the S&P 500 gaining 3.26%, the Nasdaq advancing 4.35%, and the Dow Jones rising 2.81%. The rally was led by tech stocks. Among the “Magnificent Seven,” Amazon (AMZN) was the top performer, soaring 8.07%. Nvidia (NVDA) added 5.44% despite continued U.S. export restrictions on AI chips like H20 to China. While Washington remains firm in curbing Chinas tech ambitions, the tariff relief helped ease global supply chain stress. The Hang Seng Index, China A-shares, and the CSI 300 also recouped losses incurred since the April 2 tariff announcement.

Markets now turn their focus to tonights U.S. CPI data. March inflation figures showed a surprising decline: headline CPI rose just 2.41% YoY and fell 0.05% MoM. Core CPI was up 2.81% YoY and only 0.06% MoM—both below consensus estimates. Notably, the newly imposed 25% steel-aluminum tariffs and 20% China-specific levies have yet to pass through to consumer prices. The negative MoM CPI print reflects weakening household spending, in line with recent consumer sentiment surveys signaling deteriorating outlook and reduced buying intentions.

(Chart 2: CPI Forecast | Source: Cleveland Fed)

Aprils CPI data, due later today, will offer clues on how tariffs are feeding into U.S. inflation. According to Cleveland Fed projections, both headline and core CPI YoY are expected to trend lower into May, while MoM figures are projected to pick up starting in April.

In our view, the Feds rate-cut trajectory will be primarily guided by labor market conditions, with inflation as a secondary concern. Although tariffs have been lowered, they remain elevated by historical standards, and inflationary pressures could re-emerge. Only in the event of a significant deterioration in job data would the Fed consider accelerating rate cuts. According to CME FedWatch Tool, the odds of the first rate cut—now expected in September—have risen to 80.2%, pushing back the anticipated timeline from July. This delay, combined with the surge in risk assets, continues to suppress gold prices.

Gold Technical Outlook

On the 1-hour chart, gold is oscillating within the $3201–$3257 range based on Fibonacci retracement analysis. A sustained break below $3215 could open room for a short-term short position, targeting the $3201 support level, with a stop loss of $5–$10. For bullish positioning, traders should wait for confirmation that $3201 holds as support before initiating light long positions within the defined range. Buy low, sell high within the $3201–$3257 channel, with tight risk control.

• Support: $3201

• Resistance: $3229, $3257

Risk Disclaimer: The views, analysis, forecasts, prices, or other information in this commentary are provided as general market commentary and do not constitute investment advice. Readers should exercise their own judgment and trade at their own risk.