Risk trades steadily rebound on Trump's talk about AI and energy

Risk-on sentiment staged a notable intraday recovery across financial markets, helping major U.S. stock indices claw back significant losses. The S&P 500 pared an early slump of up to 66 points to trade down just 17 points at session highs. The turnaround in market momentum was reinforced by a retreat in crude oil prices, a softening US dollar, and 10-year Treasury yields pulling back below the critical 5.00% psychological threshold. The primary catalyst behind the rebound was a barrage of public statements from Donald Trump addressing key geopolitical and regulatory concerns. Trump pledged to halt artificial intelligence regulation, labeling oversight efforts a hoax and providing an immediate boost to technology shares. Additionally, he asserted that Russia and Ukraine agreed to avoid strikes on energy infrastructure and projected that military tensions involving Iran would be brief. Despite the short-term relief rally, market analysts urge caution regarding sustainability. Geopolitical claims remain unconfirmed by foreign counterparts, and broader market direction hinges on the upcoming FOMC policy decision scheduled for Wednesday.