Hong Kong, China – Asian markets ended a five-day winning streak due to uncertainty surrounding the US-China trade war. This uncertainty arose after conflicting messages from the Trump administration regarding tariffs on Chinese goods. Global stocks saw a brief rally before losing momentum, leading to a 0.3% drop in a regional stock gauge. Investors grew cautious following remarks by Treasury Secretary Scott Bessent, casting doubt on a swift resolution to the ongoing trade dispute.
In Hong Kong, stock prices fell by 1.1%, marking the first decline in four days. The yen rebounded after two days of losses, while the dollar weakened. Gold prices surged by 1.4% as investors sought the safe-haven asset amidst market volatility. In Europe, equity-index futures slipped by 0.1% amid quarterly earnings reports from companies like BNP Paribas SA and Nestle SA.
The recent rally in global stocks was attributed to President Donald Trump’s apparent reconsideration of his aggressive trade policies and Federal Reserve stance. However, uncertainty persists as investors struggle to anticipate market movements amidst conflicting signals from administration officials. Joshua Crabb, head of Asia Pacific equities at Robeco Hong Kong Ltd., emphasized the importance of focusing on fundamentals and maintaining a margin of safety in investments.
Trump indicated a potential trade deal with China, hinting at a revised tariff rate in the coming weeks. Meanwhile, discussions are underway regarding reductions in tariffs on the auto industry to alleviate concerns over profit and job losses. Bessent clarified that there have been no unilateral offers from the president to remove tariffs on China, emphasizing the administration’s consideration of non-tariff barriers and government subsidies in trade negotiations.
In European markets, car sales rebounded last month, with the UK and electric vehicles driving growth. A global head of equity strategy at Jefferies Financial Group Inc. suggested diversifying portfolios with Chinese, Indian, and European assets amidst potential corrections in US markets. Concerns over American exceptionalism waning under Trump’s tariff policies have fueled pessimism in global markets, highlighting the administration’s sensitivity to financial market reactions.
Amidst these market dynamics, Australia prepares for potential fiscal expansion under the center-right opposition, contrasting with the ruling Labor Party’s policies. China recently issued special sovereign bonds to mitigate trade tensions with the US. Oil prices remained affected by OPEC+ supply prospects and US-China trade tensions. These developments underscore the interconnected nature of global markets and the impact of geopolitical decisions on economic outcomes.