April's headline inflation rate continued to ease, dropping to 2.3% compared to 2.4% last March, reaching its lowest point since February 2021, while core inflation held steady at 2.8%. President Trump has highlighted cheaper prices in several categories, including gasoline, energy, groceries, and eggs, though the effects of Liberation Day tariffs implemented on April 2nd are expected to appear more significantly between May and October due to inventory stockpiling and tariff delays. Consumer sentiment coming from the University of Michigan declined 8% from March to April, with Americans expecting prices to surge over the next year in line with weaker labour markets, a weaker economy, and diminished income growth. Federal Reserve Chair Jerome Powell, criticised by Trump as "too late Powell", is maintaining a wait-and-see approach with a 91.6% probability of no interest rate cut at the June meeting, only seeing a September cut if ever. The report reveals stark differences in consumer sentiment based on political affiliation, with Democrats showing much lower confidence in the economic outlook than Republicans.

EQUITY

Wall Street are seeing a huge influx of buyers, pushing the broad market higher, though the Dow gain was limited, largely due to UnitedHealth's 18% decline after the company suspended its full-year outlook. Tech led the rally with a 2.3% sector gain, mostly from Nvidia's 5.6% gain following its AI partnership announcement with Saudi Arabia's Humain, possibly due to Trump's visit. The S&P 500 turned positive for the year for the first time since late February, recovering from losses that began when President Trump announced sweeping tariffs.

GOLD

Gold prices initially drop to a two-week low of $3,207 per ounce following the US-China agreement to roll back part of applied tariffs before rebounding to around $3,265 on signs of continued mild inflation. Improved sentiment might steer the market away from safe-haven assets. Gold ETFs recorded their fifth consecutive monthly increase with net inflows of 115 tonnes in April, the largest in over three years, with China accounting for nearly 65 tonnes of these investments, according to the World Gold Council.

OIL

Oil prices are near three-week highs, with WTI rising higher than Brent due to a U.S.-China agreement to temporarily lower tariffs, lifting sanctions on Syria, and renewed U.S. threats of sanctions against Iran. The market optimism persisted even with OPEC+'s planned addition of 411,000 barrels per day in June and U.S. crude inventories accumulated 4.3 million barrels.

CURRENCY

The benjamin retreated after gaining to a month high on Monday due to softer headline inflation that may strengthen the case for the Fed to cut rates, although the tariff situation may have pushed back the calendar to September. Other currencies benefitted greatly from the dollar's fall, with the euro rebounding after dipping below the 1.11 level and sterling overturning prior significant losses felt on Monday.