TOKYO (AP) – Asian shares showed a generally positive trend on Wednesday, buoyed by the announcement of an agreement between China and the U.S. regarding a framework to follow up on the trade truce that was established in Geneva the previous month. This news has positively influenced investor sentiment across the region.
In Japan, the benchmark Nikkei 225 index climbed 0.5%, reaching 38,385.37 during morning trading. This increase was supported by data from the Bank of Japan, which indicated a slowdown in wholesale inflation for May, potentially reducing the pressure on the central bank to raise interest rates in its upcoming policy board meeting.
Other markets in Asia also experienced gains; Hong Kong's Hang Seng index rose 0.8% to 24,364.77, and the Shanghai Composite increased by 0.5% to 3,402.72. Meanwhile, Australia’s S&P/ASX 200 saw a modest increase of 0.3%, closing at 8,612.40, and South Korea's Kospi climbed 0.6% to 2,889.88.
On Wall Street, the S&P 500 experienced a 0.5% rise on Tuesday, concluding at 6,038.81, as trade negotiations between the U.S. and China continued into a second day. The Dow Jones Industrial Average saw a slight increase of 0.2%, finishing at 42,866.87, while the Nasdaq composite gained 0.6%, reaching 19,714.99.
The stock market has seen a significant rally following a recent decline of approximately 20% from a record high two months ago. The downturn was triggered by President Donald Trump's announcement of stringent tariffs, which raised concerns about a possible recession. Investor optimism has largely stemmed from hopes that Trump would reduce tariffs after achieving trade agreements with several nations. Currently, the S&P 500 stands just 1.7% away from its peak in February.
Analysts observed that the two days of discussions in London concluded with a consensus that reaffirmed previous agreements rather than introducing substantial new measures. According to Stephen Innes, managing partner at SPI Asset Management, the outcome produced more of a procedural commitment than actionable solutions that the markets might have anticipated.
U.S. Secretary of Commerce Howard Lutnick stated on Tuesday evening in London that the negotiations with China were progressing positively. Both nations have put numerous tariffs on hold as discussions advance. However, the ongoing uncertainty regarding future trade policies continues to impact corporate performance and profitability.
In this context, Designer Brands, the parent company of the DSW shoe store chain, has recently withdrawn its financial forecasts for 2025, citing “uncertainty stemming primarily from global trade policies.” The company reported a larger-than-anticipated loss for the beginning of the year, and its revenue fell short of estimates. CEO Doug Howe attributed this to “persistent instability and pressure on consumer discretionary spending,” leading to an 18.2% decline in the company’s stock.
Despite these challenges, the sentiment among small U.S. businesses appears to be improving. A survey released on Tuesday indicated a slight uptick in optimism regarding business conditions and sales growth for May, suggesting that while the economy may continue to face hurdles, business owners are expecting more favorable developments.
In a contrasting example, Tesla’s stock rose by 5.7%, bouncing back after significant losses. The electric vehicle manufacturer had faced a decline in share value after concerns arose regarding Elon Musk's relationship with Trump. Additionally, shares of Taiwan Semiconductor Manufacturing Co., one of the world’s leading chipmakers, increased by 2.6% following an announcement that their revenue for May surged nearly 40% year-over-year.
In early trading on Wednesday, the yield on the 10-year Treasury note slightly decreased to 4.48% from 4.47% recorded the previous day. Meanwhile, benchmark U.S. crude oil traded down by 12 cents to $64.86 per barrel, and Brent crude, the international benchmark, fell 15 cents to $66.72 per barrel. The U.S. dollar strengthened against the Japanese yen, trading at 144.94 yen from 144.84 yen, and the euro slipped to $1.1414 from a previous rate of $1.1425.
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AP Business Writer Stan Choe contributed to this report.
Yuri Kageyama, The Associated Press
