Trump-Xi anticipated meet sets Dow to a 400-point high, Indian markets sink

With the Dow rallying to a 400 point high, US markets saw steady gain. Trump’s tweet has reported sent the market into a tizzy, calming the US-China earlier trading woes.

While Trump’s tweet sent the global markets soaring. Meanwhile, India’s Nifty 50 failed to sustain its initial euphoria. The Nifty 50 initially opened gap up and gained 82 points, but sunk lower during intra day trade and is up now just 19 points

President Donald Trump in his tweet said he had a fruitful conversation with President Xi Jinping and would meet him at the G20 Summit in Japan next week.

This tweet helped the US markets remain buoyant all day with the Dow closing at up 353 points, or 1.4%. and S&P 500 (SPX) and the Nasdaq Composite (COMP) finishing 1% and 1.4% higher, respectively. European stocks also closed in the green.

June also saw the Dow and the S&P up 6.7% and 6%, respectively. The Nasdaq too is all set for a 6.7% jump this month.

Eurozone growth has been far behind for quite some time now. There has been stimulus commitment of the ECB is taking some attention off the recession risk.

The news hasn’t gone well with the euro which is down 0.2%, buying $1.1196. Currencies tend to rise in a higher interest rate environment. This was one of the major reasons behind US dollar strength last year.

Trump had earlier pressurized the Fed under Powell not to hike rates, claiming that comparatively lower interest rates for the euro gave them an advantage over the U.S.

Earlier, Trump claimed the seven Fed interest rate hikes in 2017 and 2018 — from the near-zero levels that followed the financial crisis, has stunted U.S’s economic growth.

President Donald Trump tweeted about the euro move, saying the fall in the euro would make it much easier for European exports to compete with US exports.

The Federal Reserve will announce the monetary policy update tomorrow. There have been expectations for an interest rate cut in July at 85% — compared with 86% yesterday — according to the CME FedWatch tool, investors will be monitoring Fed Chairman Jerome Powell’s future policy strategy.