Global markets are rallying after Trump tempers his Huawei ban after 'big reality check'
- Asian and European stocks and US futures rose on Tuesday after Trump tempered his Huawei ban.
- The Chinese telecoms giant can buy US products to maintain its networks and release software updates, but it can't buy American components for new devices.
- "This latest move by Trump shows just how haphazard his policies are and also how pervasive Huawei goods and technology are," said Jasper Lawler, head of research at London Capital Group.
Asian and European stocks and US futures rose on Tuesday after US President Donald Trump tempered his Huawei ban, permitting US companies to do business with the Chinese telecoms titan for another three months.
Huawei's blacklisting hammered US companies that trade with it or rely on its services or equipment. For example, shares in chipmakers Qualcomm, Broadcom, Micron Technology, and Nvidia fell by more than 3% on Monday, sending the tech-heavy Nasdaq index down 1.5%.
In response to the fallout, the US Commerce Department has granted Huawei a temporary license to buy US products to maintain its networks and release software updates for existing smartphones and tablets. However, Huawei is still banned from buying American components to manufacture new devices.
"This latest move by Trump shows just how haphazard his policies are and also how pervasive Huawei goods and technology are," said Jasper Lawler, head of research at London Capital Group. "Yesterday was a big reality check for Trump and shows the incomplete information available for his decision."
The Huawei ban came after Trump accused China of sabotaging a prospective trade deal, hiked tariffs on $200 billion worth of Chinese goods, and threatened to extend tariffs to a further $300 billion worth. China retaliated with higher tariffs on $60 billion worth of US goods, starting in June.
"Whether it's Huawei or tariffs, I would see all of this in the broader context of giant tug-of-war between the two superpowers being played out in front our eyes," said Neil Wilson, chief market analyst for Markets.com. "As such, the more this goes on the lower the chance of a meaningful resolution to any of it."
Here's the market roundup as of 9.50 a.m. (4.50 a.m.):
Asian indexes regained ground. The Shanghai Composite climbed 1.2%, the SZSE Component jumped 1.9%, and Hong Kong's Hang Seng rose 1.3%.
European equities opened higher with Germany's DAX up 0.6%, Britain's FTSE 100 up 0.5%, and the Euro Stoxx 50 up 0.4%.
US stocks are set to open higher. The futures underlying the Dow Jones Industrial Average and S&P 500 rose 0.2%, while Nasdaq futures climbed 0.4%.