International share markets rallied overnight on positive news – the US and China are both significantly reducing the tariffs they're applying on each other's products. This ASX stock market is likely to end today materially higher than yesterday.
The Nasdaq Composite Index (NASDAQ: .IXIC) jumped 4.35% and the S&P 500 Index (SP: .INX) surged 3.26%. That means the Nasdaq Composite has now rallied 22.5% from 8 April 2025.
Both indices are still lower than where they were three months ago, but they have recovered most of the sell-off.
However, tariffs do still remain. US tariffs on Chinese goods have been reduced to 30% (from 145%), while Chinese tariffs on US goods have been reduced to 10% (from 125%).
With these large shifts happening, what's an investor to do?
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What I'd do amid the ASX stock market rally
I've been saying for many weeks that it was a good time to invest, and it wasn't too late to look at opportunities.
Even after a rally today, I still believe investors can make a good long-term choice by investing.
It would have been impossible to enact the rest of our lifetime's investing within the last few weeks – we'll still be investing next month, next year, and further ahead.
Aussies who regularly invest in an index-based exchange-traded fund (ETF), such as the Vanguard Australian Shares Index ETF (ASX: VAS), can continue with that strategy and be successful, in my view. That's the joy of dollar-cost averaging; you'll buy at lower and higher share prices over time.
I believe there are always good opportunities on the ASX, though there are fewer attractive opportunities than a few weeks ago. In the coming days, I'll pick over the positive reaction and point out some investments I still view as good value.
The VanEck Morningstar Wide Moat ETF (ASX: MOAT) is one fund I think is nearly always attractive because the analyst team only pick competitively-advantaged businesses that are seen as good value.
More volatility to come?
It's common for the ASX stock market to go through volatility sometimes. With how the first few months of Trump's Presidency have gone, I'll be surprised if more volatility doesn't come along during Trump's four-year term, or even this year.
The market has reacted very positively. For now, it's a 90-day reprieve between the economic superpowers (with 10%+ tariffs still in place), and there are plenty of other countries that the US hasn't reached a deal with yet (such as the EU). In my mind, there isn't a need for buyers to have an intense feeling of FOMO today.
I'll continue to regularly invest in what I think is the best place to put my money.
