BANGKOK – Asian markets took a dip on Tuesday as concerns about U.S.-China trade tensions dampened the regional economic outlook. In Tokyo, the Nikkei 225 fell by 1.1% to 38,336.73 following the reopening of markets in Japan after a public holiday. Hong Kong’s Hang Seng index dropped 0.6% to 23,196.33, while China’s Shanghai Composite slightly declined by 0.1% to 3,368.24. Meanwhile, Australia’s S&P/ASX 200 registered a 0.7% loss, closing at 8,252.50. South Korea’s Kospi decreased by 0.3% to 2,637.45 after the Bank of Korea cut its benchmark interest rate to 2.75% from 3%. This marked the third cut in four meetings as the bank aims to support a slowing economy.
In Taiwan, the Taiex fell by 1%, contrasting with India’s Sensex, which posted a 0.4% gain. The U.S. President indicated that previously announced increases in tariffs on imports from Canada and Mexico would proceed following a temporary one-month postponement. Recent actions by the president have strained relationships with several U.S. trading partners, with threats to increase tariffs potentially prompting retaliatory measures and raising the specter of a trade war.
In addition to these tariff uncertainties, the U.S. has imposed an additional 10% tariff on Chinese imports, in part due to concerns over China’s role in producing the opioid fentanyl. Multiple major corporations have voiced concerns regarding unpredictable U.S. trade policies, with the University of Michigan’s latest consumer sentiment index reflecting a 10% decrease in the past month linked to apprehensions over tariffs and rising inflation.
U.S. stock markets saw a continuation of last week’s decline on Monday. However, German stocks experienced an uptick, with the DAX increasing by 0.6% following a political victory by conservatives amid economic concerns in Europe’s largest economy. The S&P 500 edged down by 0.5% to 5,983.25 on Monday, despite fluctuating between gains and losses throughout the trading session. The Dow Jones Industrial Average managed a slight gain of 0.1% to 43,461.21, whereas the Nasdaq composite fell substantially by 1.2% to 19,286.92.
Warren Buffett’s Berkshire Hathaway marked one of the day’s notable stock increases, climbing 4.1% after reporting an increase in operating profits for the latest quarter. Nonetheless, the announcement included a caveat, as the conglomerate revealed a significant cash reserve of $334.2 billion, suggesting that Buffett might see limited buying opportunities in a market perceived by some as overvalued. Meanwhile, Starbucks’ shares rose by 1.3% following its announcement to reduce 1,100 corporate jobs and leave additional roles vacant as the company’s new CEO Brian Niccol looks to streamline operations.
Large U.S. companies have generally reported stronger-than-expected profits in late 2024, driving the S&P 500 to record levels before its recent downturn. Nvidia, a critical stock in the artificial intelligence sector, is set to release its profit report following a shake-up in the AI industry by China’s DeepSeek. This move questioned previous assumptions regarding the capital necessary for the burgeoning AI ecosystem, which includes the energy needed for large-scale data centers.
Nvidia’s shares took a hit, declining by 3.1%, becoming the heaviest weight on the S&P 500. This week’s financial news will also feature updates on consumer confidence and inflation, crucial topics leading Wall Street’s focus after the recent market slump.
In Tuesday’s early trading, the price of U.S. benchmark crude oil rose by 52 cents to $71.22 per barrel on the New York Mercantile Exchange. Brent crude, the globally referenced standard, increased by 0.7% to $74.75 per barrel. The currency market saw the dollar fall to 149.50 yen from 149.71 yen, while the euro strengthened to $1.0473 from $1.0468.
