A 90-day tariff truce sparks a global market rally—here’s how Singapore investors can capitalise on the opportunity with a balanced investment strategy.
After months of intensifying tensions between the world’s two largest economies, the US and China have reached a temporary trade agreement, potentially ending a turbulent chapter in their long-standing tariff war.
In a closed-door summit in Geneva, top officials made a deal that saw reciprocal tariffs cut dramatically from 145% to 30% by the US and 125% to 10% by China for the next 90 days. The 20% tariff on Chinese fentanyl-related products will remain.
Source: Google Finance, 13 May 2025
Overall, this significant reduction in tariff rates is seen as a positive move, and the announcement of the deal was met with global optimism. Stock markets around the world reacted swiftly, with Hong Kong-listed shares surging by nearly 3%, Germany’s DAX hit a one-year high, and Europe’s Stoxx 600 index gaining 1%. On Wall Street, US stock futures rallied, with Nasdaq futures up 3.8%, S&P 500 futures rising by 2.8%, and Dow Jones futures climbing 3.1%.
Market Outlook: A Risk-On Sentiment Returns
The agreement is being widely hailed as better than expected by market analysts, many of whom are now anticipating further upside for risk assets. The reduction in tariffs has injected much-needed optimism into the global markets, and while the 90-day period may not be long enough to achieve a complete resolution, it creates a favorable environment for short-term market rallies. Investors and analysts are hopeful that this is the first step toward a more lasting resolution to the trade war.
The positive market reaction is not limited to equities. The US dollar strengthened by 1%, and the yield on the benchmark US 10-year Treasury note rose by 6 basis points as the price of the note edged lower. This suggests that global investors are betting on the possibility of better economic conditions and increased trade volumes in the coming months.
The improved sentiment has also benefitted sectors most exposed to the trade conflict. Shipping stocks, such as Maersk, saw a massive 12% jump on Monday following the announcement. This is reflective of market expectations that the reduction in tariffs will lead to an increase in global trade volumes, especially in container freight.
What This Means For You: Navigating Uncertainty with Strategy
For everyday investors, the temporary trade truce offers both opportunities and risks. On the one hand, the sharp reduction in tariffs could reignite global trade, improve corporate earnings, and boost equity markets. On the other hand, the agreement is only valid for 90 days, with no guarantee that a more permanent solution will be reached, so this is not a done deal.
With a surge in global equities and the potential for a stronger global economy, a greater equity allocation may be appropriate in the near term. However, volatility will continue to be the name of the game in 2025. While US and China equities are well-positioned for gains, investors should be mindful of volatility if negotiations stall again.
It is therefore crucial to maintain a balanced portfolio that includes both growth assets and defensive income generators to weather any future uncertainties.
How to Position Your Portfolio: Syfe’s Core Equity100 and Income+ Strategy
To navigate the current market landscape and maximise potential gains, consider a two-pronged investment strategy using Syfe’s managed portfolios:
1. Capture Global Equity Upside with Core Equity100
Syfe’s Core Equity100 is designed to give you broad exposure to global equities, including high-performing U.S. and China tech stocks that stand to benefit directly from improved trade relations. This 100% equity portfolio is growth-focused and ideal for investors looking to capitalise on market rallies. For the tariff truce-induced rally, Core Equity100 saw a 4.59% jump in the past 7 days compared to the S&P 500’s 4.73%.
2. Stabilise Returns with Income+
While equities may rally, fixed income remains a key component of a resilient portfolio. Syfe’s Income+ portfolio focuses on high-quality bonds that offer stable, monthly payouts. With bond yields likely to remain attractive as rate-cut pressures ease, Income+ helps cushion volatility and provides a steady income stream.
3. Dollar-Cost Average Into UCITs ETF with Syfe Brokerage
For those who prefer a more hands-on approach, Syfe Brokerage offers access to low-cost UCITS ETFs listed on international exchanges. Investors can build their own diversified portfolios by dollar-cost averaging (DCA) into global equity, bond, and sector-specific ETFs.
DCA is a proven strategy that helps smooth out volatility by investing a fixed amount at regular intervals, regardless of market conditions. In the context of the current trade truce, this approach allows investors to participate in the rally while reducing the risk of entering the market at a high point.
Popular UCITS ETFs to consider via Syfe Brokerage include:
- iShares Core MSCI World UCITS ETF (broad global exposure)
- Vanguard FTSE All-World UCITS ETF (emerging + developed markets)
- iShares China Large Cap UCITS ETF (for China exposure)
- iShares USD Treasury Bond 7-10yr UCITS ETF (for fixed income stability)
By combining passive investing with DCA, Syfe Brokerage users can take a long-term view while benefiting from greater control and flexibility.
Stay Invested, Stay Diversified
The latest US-China deal may not be permanent, but it has sparked optimism that the tide is turning in global trade relations. For investors, the key takeaway is that markets can react swiftly to geopolitical shifts. Having a well-diversified portfolio ensures you are positioned to seize opportunities while cushioning against setbacks.
Syfe’s professionally managed portfolios like Core Equity100 and Income+, along with the flexibility of Syfe Brokerage, offer Singapore investors the tools to navigate today’s dynamic market environment.
Take advantage of the trade-driven rally with a smart, diversified portfolio. Explore Syfe Core Equity100, Income+, and Brokerage to build your long-term investment plan.
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