Market Round-Up: From Fed to Beijing: How Central Banks and Trade War Shaped Markets This Week

Market Round-Up for May 26–31, 2025

This week, global financial markets experienced significant fluctuations influenced by central bank decisions, escalating trade tensions, and mixed corporate earnings. The Federal Reserve maintained its interest rate stance, while China's central bank implemented measures to support its economy. Meanwhile, trade negotiations between major economies faced renewed challenges, casting uncertainty over global economic prospects.

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1. U.S. Economic Updates

• The minutes from the latest FOMC Meeting held on May 6-7, 2025, was released on May 28, 2025. Minutes highlighted the Fed's concerns about the potential for stagflation—a scenario characterized by slowing economic growth coupled with persistent inflation. Policymakers expressed uncertainty about the future trajectory of the economy, particularly in light of recent trade policy developments and their impact on inflation and employment. The next scheduled FOMC meeting is set for June 17–18, 2025. 

  
  

• In addition, the U.S. Department of Commerce reported a slowdown in GDP growth for the first quarter of 2025, with the economy expanding at an annualized rate of 1.8%, down from 2.3% in the previous quarter. This deceleration reflects the impact of tighter monetary policy and ongoing trade disputes on economic activity.

  
  

• President Trump announced new policies targeting Chinese students and academic institutions, including visa restrictions and funding cuts for universities collaborating with Chinese entities. These measures have raised concerns about the potential impact on U.S. higher education and research sectors.

2. Trade War Developments

• Trade negotiations between the U.S. and China have stalled, with President Trump accusing China of violating a recent agreement by failing to resume rare-earth mineral exports. The impasse has led to increased tariffs and export controls, heightening tensions and impacting global supply chains.

• The European Union announced new tariffs on certain U.S. agricultural products in response to subsidies provided to American farmers. This move has further strained transatlantic trade relations and raised concerns about retaliatory measures.

• Australia and the Middle East have also been affected by the escalating trade tensions, with key industries such as mining and energy experiencing disruptions in export markets. Major economic players are closely monitoring the situation and considering strategic adjustments to mitigate potential impacts.

  
  

3. China Economic Insights

• In response to economic pressures, the People's Bank of China announced a 0.1 percentage point cut to its seven-day reverse repo rate and introduced a 10-point monetary policy package aimed at stabilizing markets and supporting growth. These measures reflect China's efforts to bolster its economy amid external challenges.

  
  

• China's National Bureau of Statistics reported a decline in industrial production growth, with output increasing by 4.5% year-on-year in April, down from 5.6% in March. Retail sales growth also slowed, indicating weakening domestic demand.

  
  

• President Xi Jinping emphasized the importance of economic stability and technological self-reliance in a recent speech, highlighting the government's focus on maintaining growth amid external uncertainties.

  
  

4. U.S. Corporate Earnings

• U.S. technology companies reported varied earnings this week. Nvidia highlighted the impact of U.S. export controls on its business in China, while other firms like Dell and Costco posted results that met or exceeded expectations. Investors remain cautious as policy uncertainties continue to influence corporate performance.

  
  

• Major banks, including JPMorgan Chase and Bank of America, reported stable earnings, with strong consumer lending offsetting declines in investment banking revenues. Several institutions announced strategic initiatives to streamline operations and enhance digital services.

  
  

5. Chinese Corporate Earnings

• Li Auto reported a significant decrease in net income for the first quarter of 2025, citing increased competition and supply chain disruptions. The company's performance underscores the challenges faced by Chinese automakers in a volatile economic environment.

  
  

• Other major Chinese companies, such as Tencent and Alibaba, are scheduled to release their earnings in the coming weeks. Investors are closely watching for updates on dividend policies and strategic plans to navigate the current economic landscape.

  
  

6. Singapore Corporate Earnings

• Singaporean companies demonstrated resilience in their latest earnings reports. Firms across various sectors, including banking and manufacturing, posted stable or improved results, indicating a steady economic recovery in the region.

  
  

• Real Estate Investment Trusts (REITs) in Singapore, such as OUE Commercial REIT and Suntec REIT, reported positive earnings, supported by strong occupancy rates and rental income. These results reflect the continued attractiveness of Singapore's real estate market to investors.

  
  

7. Hong Kong Corporate Earnings

• Hong Kong-listed companies faced economic headwinds this week, with several firms reporting earnings that reflected the impact of ongoing trade tensions and market volatility. Despite challenges, some sectors showed signs of adaptation and resilience.

  
  

• HSBC reported steady earnings, with growth in its Asia-Pacific operations offsetting challenges in other regions. Other major companies, including CK Hutchison Holdings and Geely Auto, are expected to release their earnings in the coming weeks, providing further insights into the health of Hong Kong's corporate sector.