Asian markets experienced a largely positive session in light trading over the Good Friday period, following fluctuations in the U.S. markets where the Dow Jones Industrial Average fell by 1.3%. This downturn was largely caused by UnitedHealth’s shares plummeting over 20% after reporting earnings that fell short of expectations. U.S. stock and bond exchanges were closed on Friday for the holiday.
In Asia, Japan’s Nikkei 225 rose by 1%, closing at 34,730.28, and South Korea’s Kospi increased by 0.5% to 2,483.42. Taiwan’s Taiex was up 0.3%, driven by technology stocks gaining traction. Notably, Taiwan Semiconductor Manufacturing Co. (TSMC) matched analysts’ profit predictions and maintained robust activity levels amidst U.S.-China trade tensions. However, TSMC issued a word of caution regarding the potential risks from ongoing tariff disputes. Wendell Huang, TSMC’s CFO, noted existing uncertainties that could arise from current trade policies. Despite this, TSMC’s U.S. stock saw a slight increase of 0.1% on Thursday.
Shanghai’s Composite index experienced a minor drop of 0.1% to 3,276.73, whereas Bangkok’s SET appreciated by 0.6%. Due to the Easter holiday, many other international markets were closed on Friday.
On Thursday in the U.S., the S&P 500 index barely rose by 0.1%, despite a majority of stocks climbing within the index. The Nasdaq composite saw a small decline of 0.1%, following its prior downturn. Nvidia’s shares suffered as the company highlighted that new export restrictions to China could impact its first-quarter results significantly, dipping 2.9% and becoming a substantial drag on the S&P 500.
Meanwhile, the Dow Jones plunged by 527 points after a substantial decline in UnitedHealth Group’s shares, the steepest since 1998, as the company reduced its financial forecast citing increased care demands from Medicare Advantage customers. Stocks in the oil and gas sector showed recovery following a bounce-back in crude oil prices. Diamondback Energy surged by 5.7% and Halliburton climbed 5.1% after U.S. benchmark crude saw a $2.18 increase to $64.01 per barrel, with Brent crude rising by $2.11 to $67.96 per barrel. Trading was halted on Friday due to the holiday.
Economic tensions stemming from U.S. President Donald Trump’s tariff strategies continue to be a source of worry, with economists fearing a recession if the tariffs are fully implemented and prolonged. Trump initially gave hopeful signs regarding potential tariff reductions through negotiations but later criticized Federal Reserve Chair Jerome Powell. The Fed noted that existing tariffs are higher than anticipated, potentially slowing economic growth and rekindling inflationary pressures.
The Federal Reserve faces a challenging situation, as lowering interest rates could encourage more spending but may also elevate prices. Trump contended with this approach, suggesting the central bank often reacts inadequately, and even hinted at terminating Powell’s position swiftly if possible. The independent operations of the Fed are crucial in maintaining the U.S.’ reputation as a secure investment destination, with historical data suggesting economies with autonomous central banks typically experience lower and more stable inflation.
In the bond market, the yield on the 10-year Treasury edged up to 4.32% from the previous 4.29% on Wednesday, after a slight easing earlier in the week. This shift follows rising concerns that the ongoing trade conflict might be eroding investor confidence in U.S. securities.
Economic data from the U.S. offered mixed insights. Unemployment filings were lower than anticipated, suggesting labor market stability, while a separate report indicated an unexpected downturn in manufacturing activity in the mid-Atlantic region.
In Europe, stocks declined by 0.6% in France and 0.5% in Germany on Thursday, despite the European Central Bank’s decision to cut its main interest rate, which typically would boost stock prices. However, this move was broadly anticipated by investors. Early Friday, the dollar traded for 142.37 Japanese yen, down from 132.44 yen a day earlier, while the euro appreciated slightly to $1.1375 from $1.1367.