Global Markets in Tension: Is the Trade Truce Just the Calm Before the Fiscal Storm?

The world applauded a trade truce between the U.S. and China. But beneath that applause, a deeper concern is brewing: America's debt crisis is no longer a whisper; it is a storm.

🤝 The Truce That Moved the Markets

In a rare moment of relief, the U.S. and China pressed “pause” on their long tariff war.

🇺🇸 The U.S. cut tariffs on Chinese imports from 145% to 30%

🇨🇳 China responded by reducing tariffs on U.S. products from 125% to 10%

What was the result? Global markets surged.

Nasdaq: +7.15%

S&P 500: +5.27%

Dow Jones: +3.41%

Wall Street called it a victory. But experienced investors know better: when everyone is celebrating, it might be time to review the exits.

💣 Meanwhile, in Washington: A Fiscal Bomb

While headlines praised diplomacy, Moody’s dropped a bomb: it downgraded the U.S. credit rating from AAA to AA1.

Why?

The U.S. national debt is spiraling out of control

Interest payments are exploding

The Treasury yield curve is flashing red

“America’s balance sheet is not only unhealthy, it is unsustainable.”

The 10-year Treasury yield shot up to 4.48%, and rumors of a liquidity crisis began to resonate in the bond markets.

📉 Stocks Soared — But So Did Anxiety

Yes, the tech sector received a boost. But beneath the surface, markets are trembling.

Small and medium enterprise indices fell into negative territory

The S&P 500 lost momentum after the initial rally

Treasury bonds bounced back, but investors are not convinced

What’s the message? Relief rallies do not erase structural risks.