Asian stocks saw a mixed performance on Wednesday, with investors struggling to build on the previous day’s strong performance on Wall Street as the euphoria surrounding the China-US trade detente began to wear off. While some markets rose, others fell, reflecting the ongoing uncertainty surrounding the trade agreement.
US President Donald Trump played up the deal with Beijing, saying, “We have the confines of a very, very strong deal with China. But the most exciting part of the deal… that’s the opening up of China to US business.” Trump’s remarks were made aboard Air Force One as he headed off on his Gulf tour, during which Saudi Arabia pledged $600 billion worth of US investments in sectors ranging from defense to artificial intelligence.
The agreements, including a significant chip deal for Nvidia and Advanced Micro Devices, are expected to boost US jobs, with Trump predicting the stock market would “go a lot higher” due to an “explosion of investment and jobs”.
The tech-rich Nasdaq rallied alongside the S&P 500, which broke back into positive territory for the year, partly thanks to data showing US inflation unexpectedly slowed last month. However, analysts pointed out that the real impact of Trump’s “Liberation Day” tolls would likely only be felt in May’s readings. In contrast, Asian markets struggled to extend the rally, with Hong Kong, Seoul, Jakarta, and Taipei rising more than one percent, while Wellington and Manila remained flat, and Tokyo, Shanghai, Sydney, and Singapore fell.
Market Performance:
- Tokyo: Nikkei 225 down 0.8% at 37,874.59
- Hong Kong: Hang Seng Index up 1.2% at 23,390.30
- Shanghai: Composite down 0.1% at 3,372.40
- New York: Dow down 0.6% at 42,140.43
- London: FTSE 100 flat at 8,602.92
Analysts cautioned that despite the welcome news of the China deal, investors were bracing for the next developments in the US president’s trade standoff with the world.
“Remember it’s an armistice, not a peace treaty — and the tariffs are still at this level, worse than we had before,” said Neil Wilson at Saxo Markets. Stephen Innes at SPI Asset Management added, “Let’s be honest, the market knows this script by heart: Trump escalates. Markets tumble. Back-channels open. China blinks. A deal gets made. Risk rallies.” The dialing down of tensions with China led JPMorgan Chase to predict US economic growth this year, reversing its earlier forecast for a contraction caused by tariffs.