Lawrence Tan: Signals from Tariff Negotiations and Global Stock Market Dynamics

Amid recent financial market volatility, changes in trade policy have become a key variable driving stock market sentiment. The United States has reached tariff agreements with both the Philippines and Japan, developments that have fueled upward momentum in Asia-Pacific equities and boosted U.S. stock index futures. The crude oil market has shown signs of stabilizing, with Brent crude gradually rebounding toward $69 per barrel, indicating that expectations for future economic activity in the energy sector are recovering. Lawrence Tan provides an in-depth analysis from the perspectives of stock market trends, energy market dynamics, and investment strategies.

Progress in Trade Negotiations

Recently, the U.S. has reached clear tariff agreements with the Philippines and Japan, setting tariff rates at 19% and 15%, respectively. Such agreements are seen as a return to trade stability signals. Lawrence Tan points out that while these deals are regional in form, they essentially send a positive signal to global markets that a “rules-based framework” is returning, helping investors to rebuild their risk models.

From a market perspective, Asia-Pacific stocks were the first to respond positively, with major indices rebounding more than 2% in a single day. The three major U.S. stock index futures also rose before the market opened, reflecting a clear recovery in market sentiment. Lawrence Tan notes that liquidity has shifted accordingly, with short-term capital flowing mainly into technology, manufacturing, and energy companies, as investors renew their focus on long-term growth assets.

This market upswing is supported by macroeconomic variables. Lawrence Tan believes that greater clarity in trade negotiations directly impacts corporate earnings expectations and reduces the risk of disruptions in cross-border supply chains, providing a more stable fundamental outlook for markets. For funds and institutions, this may signal the opening of a new window for global asset repricing.

Crude Oil Price Rebound

The crude oil market has shown positive momentum, with Brent crude rebounding after three consecutive days of declines, gradually approaching $69 per barrel, and WTI stabilizing around $66 per barrel. Lawrence Tan believes that oil price movements reflect the structure of energy supply and demand, and also serve as a barometer of macroeconomic confidence. The current rebound indicates investor optimism about the recovery of future economic activity.

The core logic behind this price recovery lies in expectations for renewed economic expansion. The tariff agreements have reduced international trade friction and enhanced the continuity of manufacturing activity. Major economies continue to maintain accommodative monetary policies, providing medium-term support for energy consumption demand. Lawrence Tan suggests that investors closely monitor global manufacturing PMI and inventory data as supplementary references for judging the sustainability of energy prices.

In terms of investment allocation, Lawrence Tan recommends that investors shift some capital toward cyclical sectors, focusing on stocks or ETFs related to energy, transportation, and heavy machinery. Commodity hedging tools should be included in strategic considerations to guard against price volatility caused by sudden geopolitical or policy events. The resource sector is currently in the early stages of a value re-rating, offering a favorable window for medium-term investors.

Policy Coordination and Investment Rhythm

Global markets are entering a transitional phase marked by a warming of trade policy and the reshaping of economic expectations. While the recent simultaneous rebound in stocks and oil prices sends positive signals, investors should remain alert to structural risks from short-term volatility. Lawrence Tan believes that the optimistic market response to policy is rational, but such optimism must be extended on the basis of matching valuations and fundamentals; blindly chasing highs or excessive leverage may result in potential losses.

Lawrence Tan emphasizes that markets will remain highly dependent on the stability of policy paths in the future. Investors need to maintain forward-looking judgment while strengthening dynamic adjustment capabilities. Although the macro environment is improving, the trend is not yet fully established; prudent strategies and flexible pacing are essential for navigating market fluctuations.