BANGKOK (AP) - Shares advanced across Asia on Monday, with heightened market activity occurring a day before U.S. President Donald Trump’s deadline for implementing higher tariffs on goods imported from China. Notably, markets in Japan and Thailand were closed due to holidays.
The Hang Seng index in Hong Kong saw a modest increase of 0.2%, closing at 24,908.37, while the Shanghai Composite index gained 0.5%, ending at 3,653.50. This upward movement follows a temporary pause on the imposition of triple-digit tariffs, which was implemented by Trump and China for 90 days in May in order to facilitate negotiations.
Tuesday marks the crucial deadline for extending this truce, as the latest negotiations held last month in Stockholm concluded without any definitive announcement from Trump regarding a possible extension of another 90 days.
In other Asian markets, Australia’s S&P/ASX 200 rose by 0.3%, reaching 8,831.40, while the Kospi index in South Korea remained nearly unchanged at 3,210.76. In the United States, the previous Friday saw the S&P 500 rise by 0.8%, closing at 6,389.45, just shy of its record high. The Dow Jones Industrial Average also made gains, up 0.5% to 44,175.61, and the Nasdaq climbed 1% to finish at 21,450.02.
Technology companies played a significant role in driving the market higher, with notable stock performances including Nvidia, which increased by 1.1%, and Apple, which saw a 4.2% rise. In addition, Gilead Sciences experienced a substantial surge of 8.3% after announcing financial results that exceeded analysts’ expectations while also raising its earnings forecast for the year. Similarly, Expedia Group saw shares rise by 4.1% following their encouraging financial results.
These developments coincide with the release of financial reports from a final batch of major companies within the S&P 500, the majority of which have reported strong results for the second quarter. However, many companies have warned that ongoing tariffs could negatively impact their profits.
In a contrasting move, entertainment giant Paramount Skydance witnessed a sharp decline of 10.5% in shares following the completion of an $8 billion merger with Paramount. Rival company Warner Bros. Discovery also experienced a notable drop of 8% in their stock prices.
This week, investors are set to receive more insights into U.S. inflation trends, with key reports anticipated on both consumer and wholesale levels, alongside updates on retail sales. The implications of Trump's trade war remain a pressing concern, particularly regarding its potential impact on the U.S. economy and the Federal Reserve’s interest rate policy, especially after the U.S. began imposing higher import taxes on numerous countries just last Thursday.
During its last meeting, the Federal Reserve decided to maintain steady interest rates but included two votes for a possible reduction. The next meeting is slated for September, and market analysts predominantly expect a quarter-point cut in interest rates, given signals indicating a waning economy.
The Federal Reserve faces dual challenges: working to cool inflation down to its target rate of 2% while also meeting its full employment mandate. While lower interest rates could stimulate both economic and investment growth, there are concerns about potential inflation re-acceleration overshadowing worries about a softening job market.
In commodities, early trading on Monday saw U.S. benchmark crude oil decline by 38 cents, settling at $63.50 per barrel, while Brent crude, the international benchmark, fell by 31 cents to $66.28 per barrel. The U.S. dollar weakened against the Japanese yen, dropping to 147.46 from 147.62, whereas the euro strengthened to $1.1673 from $1.1650.
