TOKYO (AP) — Asian shares exhibited a mixed performance on Tuesday, influenced by a rally on Wall Street following U.S. President Donald Trump’s reassurances regarding relations with China. This came after significant volatility in U.S. markets, highlighting the ongoing tensions and uncertainties surrounding trade policies.
In Japan, the benchmark Nikkei 225 index fell by 1.4%, closing at 47,419.87 as trading resumed after a national holiday on Monday. In contrast, the Hang Seng index in Hong Kong dipped 0.4% to 25,788.44, while the Shanghai Composite in China saw a slight increase of 0.2%, reaching 3,897.56.
Trump, in a message posted on his social media platform on Sunday, expressed optimism about U.S.-China relations, stating, “Don’t worry about China.” He noted the importance of mutual economic interests, emphasizing that neither he nor China’s leader, Xi Jinping, desired a depression for their respective countries. The remarks aimed to assuage fears among investors following a tumultuous week for the markets.
Previous Friday, the S&P 500 experienced its worst drop since April, primarily triggered by Trump’s harsh criticisms of China. He referred to China's behavior as a “moral disgrace” in the international arena and hinted at the possibility of imposing much higher tariffs on Chinese goods. The trading environment remains uncertain, with ongoing discussions about potential meetings between Trump and Xi at an upcoming regional summit.
In Australia, the S&P/ASX 200 index edged down by 0.1% to 8,876.20, while South Korea’s Kospi managed a gain of 0.6%, closing at 3,605.10. Meanwhile, the U.S. markets rebounded, with the S&P 500 regaining 1.6% to close at 6,654.72. This recovery accounted for more than half of its prior losses, with the Dow Jones Industrial Average rising 1.3% to 46,067.68 and the Nasdaq composite increasing by 2.2% to 22,694.61.
Mizuho Bank noted that the swift fluctuations in equity markets echoed the chaotic swings experienced in April, following Trump’s announcement of worldwide tariffs, dubbed “Liberation Day.” Trump’s inconsistent approach to tariffs has led to significant market movements, alongside expectations of multiple interest rate cuts by the Federal Reserve aimed at stimulating economic growth.
Despite these positive movements, market analysts express concerns over the perceived overvaluation of stocks, particularly in the context of an anticipated earnings reporting season. The upcoming announcements from major U.S. companies, including JPMorgan Chase, Johnson & Johnson, and United Airlines, will be crucial in determining market sentiment, as these firms disclose their profits for the summer period.
Stock movements reflected varying responses to corporate earnings predictions; for instance, Broadcom surged by 9.9% following news of a collaboration with OpenAI to develop customized AI accelerators. Conversely, Fastenal faced a significant setback, with shares plummeting 7.5% after reporting quarterly profits that fell short of analyst expectations.
On the commodities front, early trading showed benchmark U.S. crude oil rising by 20 cents to $59.69 a barrel, while international benchmark Brent crude gained 21 cents to reach $63.53. In currency markets, the U.S. dollar weakened slightly against the Japanese yen, trading at 152.13 yen, down from 152.29 yen. The euro, meanwhile, appreciated to $1.1581 from $1.1569.
