Asian Stocks Start Cautiously, Dollar Holds Decline
Asian stocks started weak on Tuesday after a rebound in big tech companies pushed U.S. stocks higher.
Regional stock indexes swung between small gains and losses while U.S. equity futures fell 0.2%. Bonds were steady in early Asian trade and the dollar was little changed after hitting its lowest level since 2023 in the last session. Technology stocks helped lift the S&P 500 0.4% at the start of what has historically been one of the quietest months for gains.
Oil extended gains on Tuesday morning, while gold steadied after posting its biggest daily gain in four weeks.
Investors continued to watch for the latest developments in the trade war after a flurry of headlines on Monday. The U.S. extended Section 301 tariff exemptions for some Chinese goods until Aug. 31. President Donald Trump’s administration wants the countries to present their “best offers” in trade negotiations by Wednesday, Reuters reported. The U.S. is pushing for a call between Trump and Xi Jinping after both countries accused each other of violating a trade deal reached last month.
“We continue to expect market volatility as investors digest new tariff headlines and incoming U.S. economic data,” said Ulrike Hoffmann-Burchardi at UBS Global Wealth Management. “Fiscal concerns remain, and geopolitical tensions are heating up.”
Trump has long said that direct talks with Xi are the only way to resolve the countries’ differences, but the Chinese leader has been reluctant to speak on the phone with his American counterpart — preferring to let advisers hash out key issues.
The last known conversation between Trump and Xi was in January before the U.S. presidential inauguration. Trump’s top economic adviser Kevin Hassett signaled Sunday that the White House is anticipating a phone call this week with the Chinese leader.
Meanwhile, Japan’s top trade negotiator Ryosei Akazawa is considering returning to the U.S. for another round of trade talks this week as hopes grow for a deal as early as this month. “Markets continue to discount the risk of a simmering trade war,” Kyle Rodda, senior market analyst at Capital.com, said. “Despite slipping down the list of market players’ priorities, below trade policy, fiscal policy and macroeconomic data, a very solid set of quarterly results from mega-cap tech drew investors to the market.” In Japan, attention will once again turn to a debt market sale on Tuesday that could increase pressure on the government to adjust its borrowing plans and calm investor nerves.
After last month’s auction revealed weak demand, the Finance Ministry will sell ¥2.6 trillion ($18 billion) worth of 10-year bonds.
In geopolitics, Russia and Ukraine concluded a second round of talks in Istanbul that failed to bring the two sides closer to ending their war but laid the groundwork for a new prisoner swap.
Stocks
S&P 500 futures fell 0.2% as of 9:20 a.m. Tokyo time
Hang Seng futures rose 0.5%
Japan Topix little changed
Australia's S&P/ASX 200 rose 0.6%
Euro Stoxx 50 futures little changed
Currencies
Bloomberg Dollar Spot Index little changed
Euro little changed at $1.1445
Japanese yen little changed at 142.72 per dollar
Offshore yuan little changed at 7.2070 per dollar
Australian dollar little changed at $0.6491
Commodities
West Texas Intermediate crude rose 0.7% to $62.98 a barrel
Spot gold little changed
Source: Bloomberg
