Asian markets faltered heading into the weekend, as momentum from the recent US-China trade truce began to fade. Investors consolidated gains after enjoying one of the best weeks since US President Donald Trump launched his aggressive “Liberation Day” tariff strategy last month.
The US dollar slipped slightly following weaker-than-expected wholesale and retail data, along with soft inflation figures. These signs raised hopes that the Federal Reserve might consider rate cuts later this year.
Oil prices edged up, recovering from Thursday’s losses amid optimism about Iran nuclear deal negotiations, spurred by President Trump’s comments on progress.
Market watchers are now eyeing further signals from the US on trade negotiations, as countries seek to avoid steep tariffs. But analysts caution that despite the temporary pause in tariff hikes, elevated duties still threaten global growth.
Chris Beauchamp, chief market analyst at IG, noted: “Even with more trade deals, tariffs remain significantly high, likely impacting future earnings. The question is whether markets have already priced in the worst or if further downturns lie ahead.”
Walmart CEO Doug McMillon echoed these concerns, warning that even reduced tariffs are too burdensome to fully absorb. “We’ll try to keep prices low, but the pressure is too great,” he said after reporting strong quarterly earnings.
In Asia, markets largely fell in early trading:
Tokyo dropped after Japan posted its first quarterly economic contraction in a year.
Hong Kong declined, with Alibaba losing over 4% due to weak Q1 revenue and sluggish consumer demand in China. Other tech stocks like JD.com, Tencent, and Meituan also slipped.
Elsewhere, Shanghai, Singapore, Wellington, and Manila dipped, while Sydney, Seoul, and Taipei posted gains.
Market Snapshot (as of 0200 GMT):
Tokyo (Nikkei 225): -0.5% at 37,572.88
Hong Kong (Hang Seng): -0.6% at 23,303.08
Shanghai (Composite): -0.3% at 3,370.03
Euro/Dollar: $1.1203 (up from $1.1185)
Pound/Dollar: $1.3314 (up from $1.3304)
Dollar/Yen: 145.20 (down from 145.65)
Euro/Pound: 84.14 pence (up from 84.07)
WTI Crude: $61.65 (up 0.1%)
Brent Crude: $64.56 (up 0.1%)
New York (Dow): +0.7% at 42,322.75 (close)
London (FTSE 100): +0.6% at 8,633.75 (close)
