Markets were mostly higher on Wednesday. The S&P 500 jumped 1.5 percent and the STOXX Europe 600 rose 0.2 percent.
Earlier in Asia, though, markets were mixed. The Nikkei 225 rose 0.7 percent but the Shanghai Composite fell 0.3 percent.
“Mounting US-China tensions bodes ominous for the global economy amid pandemic fragilities,” Vishnu Varathan, head of economics and strategy at Mizuho Bank, wrote in a note after the US said it was considering sanctions on Chinese firms and officials over China’s plans to impose new security legislation on Hong Kong.
Elsewhere, though, investors shrugged off the rising geopolitical tension.
In Europe, market sentiment was boosted by a stimulus plan from the European Commission while US stocks were buoyed by hopes for an economic recovery as restrictions are relaxed.
However, David Kelly, chief global strategist at JPMorgan Asset Management, said that the recovery will take some time and that the rally is being driven mainly by large flows of money.
“You got a huge amount of liquidity with nowhere to go,” said Kelly.
“We will see a start of a recovery, but it shouldn’t be misinterpreted,” Kelly said. “We’re not going to get back to full employment or even an unemployment rate below 10% any time this year, and maybe it will take most of next year.”
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