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Highlights
- Hopes of trade tensions easing boost US market sentiment
- Investors await key earnings update from Tesla (NASDAQ:TSLA)
- Local tech ETF (ASX:ATEC) shows resilience despite volatility
Global markets found a rare moment of optimism as comments from US Treasury Secretary Scott Bessent hinted at the possibility of a de-escalation in the ongoing trade war with China. Both the S&P 500 and Nasdaq indices saw gains of over 2%, rebounding from recent pressures and signaling investor relief over potential diplomatic progress.
Bessent’s remarks, which emerged from a leaked transcript during a private investor summit, revealed that neither Washington nor Beijing views the trade conflict as sustainable. While formal negotiations are yet to begin, the acknowledgment that a deal is ultimately necessary helped ignite a wave of optimism across risk assets. However, Bessent did caution that progress may be slow, suggesting the path to resolution remains complex.
On the currency front, the Australian dollar slipped 0.6% to trade at 63.78 US cents, while iron ore prices dipped 0.7% to $98.65 per tonne, reflecting continued global economic uncertainty.
A key focus for US investors is the upcoming quarterly earnings from Tesla (NASDAQ:TSLA), which is expected to be released after the US market closes. The electric vehicle giant’s stock surged more than 4% overnight, although it remains down over 40% year to date, underscoring the volatile sentiment surrounding the company. The results could prove pivotal in shaping the near-term narrative for one of the most closely followed names in the tech sector.
Back home, local investors may remember the buzz around the "WAAX" cohort – WiseTech Global (ASX:WTC), Block Inc (ASX:SQ2) (formerly Afterpay), Altium (ASX:ALU), and Xero (ASX:XRO). These names once symbolized Australia’s answer to the global tech boom. Their popularity led to the creation of the S&P/ASX All Technology Index, tracked by the Betashares S&P/ASX Australian Technology ETF (ASX:ATEC).
Launched at the height of the tech hype in early 2020, ATEC initially suffered a sharp drop, declining over 25% shortly after inception. Despite that rocky start, the ETF has delivered a solid 13.55% annual return since inception (as of 31 March 2025). However, recent trade tensions have weighed on sentiment again, with the ETF down 15% year to date.
While tech remains a battleground both globally and locally, glimpses of easing trade rhetoric and strong fundamentals in key names may help restore confidence in the sector. Investors will be watching upcoming earnings and policy developments closely for further direction.
