Markets wobble as Trump-Xi talks offset by Musk row
Markets stuttered on Friday as optimism from "very positive" talks between presidents Donald Trump and Xi Jinping was wiped out by the stunning public row between the US leader and Elon Musk.
The much-anticipated discussions between the heads of the world's biggest economies fuelled hopes for an easing of tensions following Trump's "Liberation Day" global tariff blitz that targeted Beijing particularly hard.
However, investors remained wary after an extraordinary social media row between Trump and billionaire former aide Musk that saw the two trade insults and threats and sent Wall Street into the red.
Wall Street's three main indexes ended down as Musk's electric vehicle company Tesla tanked more than 14 percent and the president threatened his multibillion-dollar government contracts.
Asian equities fluctuated in early business, with some observers suggesting traders were positioning for what could be a volatile start to next week in light of the row and upcoming US jobs data.
Hong Kong dropped after three days of strong gains, while Sydney, Wellington, Taipei and Bangkok also retreated.
Mumbai led gainers after the Reserve Bank of India slashed interest rates more than expected.
Tokyo and Singapore rose, while Shanghai was also marginally higher.
London and Paris edged up at the open, although Frankfurt was down.
Chris Weston at Pepperstone said that while the call with Xi was "seen as a step in the right direction, (it) proved to offer nothing tangible for traders to work with and attention has quickly pushed back to the Trump-Musk war of words".
"It's all about US nonfarm payrolls from here and is an obvious risk that Asia-based traders need to consider pre-positioning for," he said.
Weston said there was a risk of Trump sparking market-moving headlines over the weekend given that he is "now fired up and the risk of him saying something through the weekend that moves markets on the Monday open is elevated".
The US jobs figures, which are due later Friday, will be closely followed after a below-par reading on private hiring this week raised worries about the labour market and the outlook for the world's top economy.
They come amid bets that the Federal Reserve is preparing to resume cutting interest rates from September, even as economists warn that Trump's tariffs could reignite inflation.
Stephen Innes at SPI Asset Management warned that while poor jobs figures could signal further weakness in the economy, a strong reading could deal a blow to the market.
"In this upside-down market regime, strength can be weakness. A hotter-than-expected (figure) could force traders to price out Fed cuts. That's the paradox in play -- where good news on Main Street turns into bad news on Wall Street."
- Key figures at around 0715 GMT -
Tokyo - Nikkei 225: UP 0.5 percent at 37,741.61 (close)
Hong Kong - Hang Seng Index: DOWN 0.2 percent at 23,860.39
Shanghai - Composite: FLAT at 3,385.36 (close)
London - FTSE 100: UP 0.1 percent at 8,817.43
Euro/dollar: DOWN at $1.1437 from $1.1444 on Thursday
Pound/dollar: DOWN at $1.3554 from $1.3571
Dollar/yen: UP at 144.00 yen from 143.58 yen
Euro/pound: UP at 84.38 pence from 84.31 pence
West Texas Intermediate: DOWN 0.2 percent at $63.25 per barrel
Brent North Sea Crude: DOWN 0.1 percent at $65.25 per barrel
New York - Dow: DOWN 0.3 percent at 42,319.74 (close)
dan/pbt
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
19 minutes ago
- Yahoo
Democratic congressman steps up his work to pull Musk toward his party
Rep. Ro Khanna, D-Calif., talked with one of Elon Musk's 'senior confidants' on Thursday about whether the ex-DOGE leader, now feuding with Donald Trump, might want to help the Democratic Party in the midterms. 'Having Elon speak out against the irrational tariff policy, against the deficit exploding Trump bill, and the anti-science and anti-immigrant agenda can help check Trump's unconstitutional administration,' Khanna told Semafor on Friday. 'I look forward to Elon turning his fire against MAGA Republicans instead of Democrats in 2026.' Khanna, who has known Musk for more than a decade, has long argued that Democrats unwisely pushed him away from their party. Now the world's wealthiest man, Musk benefited from the Obama administration's clean energy investments, defending them against Republican attacks in the 2012 election. He supported Democratic nominees for president until 2024, when he endorsed Trump for president — and spent more to help elect him than he had for any Democrat. Since Musk began attacking the Trump-backed GOP tax bill as an 'abomination' this week, Democrats in Congress have amplified his criticism and even adopted some of his language. But few besides Khanna have gone as far as talking about bringing Musk back into the Democratic tent; most Democrats are furious at Musk's DOGE work to dismantle parts of the federal government and are confident that he is a political liability for Trump. 'How great is it that that dipshit Elon Musk is out?' Gov. Tim Walz of Minnesota said at last Friday's Democratic fish fry in South Carolina, after Musk left the administration. 'The decisions he was making were literally killing people, so he could dance around and act like he was doing something.' Musk was a 'historic villain' whose unpopularity had helped Wisconsin Democrats win the state's April 1 supreme court race by 10 points, said state Democratic Party chairman Ben Wikler. At their 'Fighting Oligarchy' rallies, the largest political events since Trump was sworn in, Sen. Bernie Sanders, I-Vt., and Rep. Alexandria Ocasio-Cortez, D-N.Y., torched Musk as the embodiment of what Democrats and fair-minded Americans should be against. Some Democrats believe that Musk could have stayed in their coalition, had they paid him a little more respect — specifically, had Joe Biden invited Musk to the White House electric vehicle summit early in his presidency. Khanna is in that camp. Others counter that the party's overall shift leftward after 2016 alienated Musk, who was never coming back. He clashed with Elizabeth Warren ('Senator Karen') over the idea of a wealth tax, and with progressives over the 'woke mind virus' that he blamed for the gender transition of his third child. That's the camp where most Democrats are, although some — like Walz — see this as a political opportunity. Still, the idea of an irate multibillionaire making problems for Republicans is enticing to plenty of Democrats, who have not been above meddling in GOP primaries to help weaker candidates win nominations. What if Musk made Republicans burn money to defend their incumbents, as he slammed them with TV ads? That's all theoretical, as Musk said last month that he would do 'a lot less' political spending now that he'd achieved his goal of electing Trump. If Musk is sincere about the political views he posts about on X, he is completely at odds with the Democratic Party, and the best they could hope for is him making trouble for Republicans out of spite. In Politico, Holly Otterbein and Lisa Kashinsky about the Democrats who hoped that Musk would have a 'villain-to-hero' arc, and help them beat Trump. But Khanna was the only voice in the party who fully believed it could happen.
Bloomberg
19 minutes ago
- Bloomberg
Trump Crypto-Wallet Spat Ends With World Liberty Buying Memecoin
Eric Trump signaled that the tension between the competing factions of Donald Trump's crypto empire has cooled and the family's World Liberty Financial will buy a 'substantial' amount of the memecoin at the center of the dispute. The president's son said in a post on X on Friday that the company responsible for the Trump memecoin isn't moving forward with a digital-wallet offering that has caused a fissure with World Liberty Financial, the crypto company owned in part by the Trump family.
Los Angeles Times
19 minutes ago
- Los Angeles Times
DOGE employees can search Social Security records, Supreme Court says
WASHINGTON — The Supreme Court cleared the way Friday for the DOGE team that had been led by Elon Musk to examine Social Security records that include personal information on most Americans. Acting by a 6-3 vote, the justices granted an appeal from President Trump's lawyers and lifted a court order that had barred a team of DOGE employees of freely examining Social Security records. 'We conclude that, under the present circumstances,' the Social Security Administration, or SSA, 'may proceed to afford members of the SSA DOGE Team access to the agency records in question in order for those members to do their work,' the court said in an unsigned order. In a second order, the justices blocked the disclosure of DOGE operations as agency records that could be subject to the Freedom of Information Act. The court's three liberals — Justices Ketanji Brown Jackson, Sonia Sotomayor and Elena Kagan — dissented in both cases 'Today, the court grants 'emergency' relief that allows the Social Security Administration (SSA) to hand DOGE staffers the highly sensitive data of millions of Americans,' Jackson wrote. 'The Government wants to give DOGE unfettered access to this personal, non-anonymized information right now—before the courts have time to assess whether DOGE's access is lawful.' The legal fight turned on the unusual status of the newly created Department of Governmental Efficiency. This was a not true department, but the name given to the team of aggressive outside advisors led by Musk. Were the DOGE team members presidential advisors or outsiders who should be not given access to personal data? While Social Security employees are entrusted with the records containing personal information, it was disputed whether the 11 DOGE team members could be trusted with same material. Musk had said the goal was to find evidence of fraud or misuse of government funds. He and DOGE were sued by labor unions who said the outside analysts were sifting through records with personal information which was protected by the privacy laws. Unless checked, the DOGE team could create highly personal computer profiles of every person, they said. A federal judge in Maryland agreed and issued an order restricting the work of DOGE. U.S. District Judge Ellen Hollander, Obama appointee, barred DOGE staffers from have accessing to the sensitive personal information of millions of Americans. But her order did not restrict the Social Security staff or DOGE employees from using data that did not identify persons or sensitive personal information. In late April, the divided 4th Circuit Court of Appeals refused to set aside the judge's order by a 9-6 vote. Judge Robert King said the 'government has sought to accord the Department of Government Efficiency (DOGE) immediate and unfettered access to all records of the Social Security Administration ('SSA') — records that include the highly sensitive personal information of essentially everyone in our country.' But Trump Solicitor Gen. D. John Sauer appealed to the Supreme Court and said a judge should not 'second guess' how the administration manages the government. He said the district judge had 'enjoined particular agency employees — the 11 members of the Social Security Administration (SSA) DOGE team—from accessing data that other agency employees can unquestionably access, and that the SSA DOGE team will use for purposes that are unquestionably lawful. ... The Executive Branch, not district courts, sets government employees' job responsibilities.' Sauer said the DOGE team were seeking to 'modernize SSA systems and identify improper payments, for instance by reviewing swaths of records and flagging unusual payment patterns or other signs of fraud. The DOGE employees 'are subject to the same strict confidentiality standards as other SSA employees,' he said. Moreover, the plaintiffs 'make no allegation that the SSA DOGE team's access will increase the risk of public disclosure.' He said checking the personal data is crucial. 'For instance, a birth date of 1900 can be telltale evidence that an individual is probably deceased and should not still receive Social Security payments, while 15 names using the same Social Security number may also point to a problem,' he said.
