Cryptocurrency and U.S. equity markets rallied on Tuesday due to optimism around potential de-escalation in U.S.-China trade tensions. Bitcoin surged by 5.47%, while Ethereum and Solana also showed significant gains. U.S. stock markets, including S&P 500 and Nasdaq 100, saw substantial recoveries. Gold prices retreated after reaching a record high, and positive sentiments were bolstered by encouraging comments from U.S. Treasury Secretary Bessent and President Trump.
On Tuesday, cryptocurrency markets and U.S. equities recorded strong rallies due to optimism surrounding potential de-escalation in U.S.-China trade tensions. Following a previous record high, gold experienced a pullback, indicating a return of risk appetite across broader markets.
Bitcoin (BTC) led the cryptocurrency surge, rising by 5.47% within 24 hours to nearly $92,800. Ethereum (ETH) also gained significantly, climbing 13.27% to around $1,790, while Solana (SOL) increased by 6.73% to reach $148.69. Overall, the cryptocurrency market capitalisation rose by 5.99% to $2.91 trillion, according to Coinmarketcap.
In parallel, U.S. stock markets showcased a substantial recovery, with the S&P 500 increasing by 2.51% to close at 5,287.76, a rise of 129.56 points. The Nasdaq 100 followed suit, climbing 2.63% or 468.11 points to 18,276.41.
Gold price, which had peaked at $3,500 per ounce on Monday, experienced profit-taking as market sentiment improved, retreating to $3,334 per ounce, a decline of 1.32% for the day.
The concerted upswing in both markets appears linked to rising hopes for improved U.S.-China trade relations. Reports from a JP Morgan-hosted private event indicated optimism from U.S. Treasury Secretary Bessent regarding trade de-escalation, identifying the current trade situation as “unsustainable.”
Bessent intimated that while formal negotiations are absent, a deal remains feasible but will likely be arduous. He mentioned a vision where U.S. and Chinese economies rebalance over two to three years. However, uncertainty remains regarding China’s readiness for such changes.
In a further positive signal, President Trump adopted a less aggressive stance toward China, stating, “We’re going to be very good to China,” and suggesting current tariffs would not reach the previously contemplated height of 145%. He predicted a substantial reduction in tariffs but not a complete elimination, accentuating his belief in a likely deal with China, according to Bloomberg.
Additionally, President Trump alleviated market concerns by dismissing speculation about firing Federal Reserve Chair Powell, reaffirming his intention to maintain stability in the Federal Reserve’s leadership, which reassured investors.
