The Chief Investment Office of Standard Chartered Wealth Management forecast that the Trump administration will reach preliminary trade agreements with major partners in 3Q and pass a moderately stimulating budget.

Furthermore, U.S. tariffs ascended to their peak since 1938, which may slacken the economy and heighten inflation. However, with deteriorating employment, the Federal Reserve may cut interest rates by 75 bps over the next 12 months, with two cuts by the end of 2025 and another in 1H26, each by 25 bps.

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With the easing of tensions in the Middle East and the agreement on trade framework details between China and the U.S., Raymond Cheng, Chief Investment Officer, North Asia of Standard Chartered Wealth Management, recommended overweighting global equities, particularly favoring Asia (excluding Japan), with a preference for Chinese and South Korean stocks. For Chinese stocks, he was relatively optimistic about offshore markets.

Over the next 12 months, the HSI was expected to challenge the higher levels of the bank's base case forecast of 24,000-26,000, with a target of 25,500. If China further strengthens fiscal and monetary stimulus measures and makes progress in reversing weak prices, it may push the market to test the upbeat forecast of 26,000-28,000.