Global stocks experienced varied performance on Wednesday as investors assessed the effects of tariffs implemented by the United States and China.
The CAC 40 index in France dropped by 0.3%, landing at 7,881.94, while Germany’s DAX encountered a slightly larger decline of 0.5%, reaching 7,881.94 as well. The FTSE 100 in Britain saw a reduction of 0.2%, settling at 8,558.31. Futures for U.S. stocks indicate a downward trend, with Dow futures decreasing nearly 0.2% to 44,620.00, and S&P 500 futures slipping by 0.5% to 6,034.25.
Earlier in the day across Asia, Japan’s Nikkei 225 index recovered some of its earlier losses, closing with a slight improvement of less than 0.1% at 38,831.48.
In the Japanese market, Honda Motor Co. saw its stocks surge by 8.2% after local media suggested that their discussions with Nissan Motor Corp. regarding a joint holding company were falling apart. In contrast, Nissan’s shares plunged 4.9%.
The Australian S&P/ASX 200 index increased by 0.5%, reaching 8,416.90, while Hong Kong’s Hang Seng index declined by 0.9% to 20,597.09, and the Shanghai Composite index fell by 0.7% to 3,229.49.
South Korea’s Kospi index advanced by 1.1% to 2,509.27 as investors seized buying opportunities following recent price drops and drew positive sentiment from a rally on Wall Street overnight.
Some analysts view the tariffs on China as distinct from President Trump’s actions targeting other trade partners, suggesting that Trump might be inclined to maintain tariffs on China for an extended period. This approach could serve to further distance the U.S. from its geopolitical competition.
Trump continues to press for a 10% tariff on goods imported from China. In retaliation, China announced tariffs on several U.S. products on Tuesday, along with an antitrust investigation into Google.
China’s 15% tariff on U.S. coal and liquefied natural gas, along with a 10% tariff on crude oil, agricultural machinery, and large-engine cars, will not take effect until next Monday. This timing allows for potential negotiations between Trump and Chinese President Xi Jinping.
Stephen Innes, managing partner at SPI Asset Management, stated, “While trade tensions haven’t boiled over yet, they are hovering precariously close to a critical point, and underestimating them could be risky.”
Trump agreed on Monday to postpone tariffs on U.S. imports from Canadian and Mexican products for an additional month. Some traders speculate that Trump may reconsider the damaging impact a prolonged trade war could have on Wall Street, noting that Trump has previously used the stock market as a barometer of his success.
However, a trade war remains a possibility, and some analysts warn of further market fluctuations due to the seriousness of Trump’s threats.
In the energy markets, benchmark U.S. crude oil fell by 40 cents, settling at $72.30 per barrel, while Brent crude, the international benchmark, decreased by 46 cents to $75.74 per barrel.
In currency exchange, the U.S. dollar decreased to 152.95 yen from 154.30 yen. The euro rose slightly to $1.0404, up from $1.0382.
