Asian stock markets edged higher on Tuesday as investors focused on ongoing U.S.-China trade negotiations. The talks aim to ease tensions and could help prevent a potential global recession.
In Tokyo, the Nikkei 225 climbed 0.9% to 38,445.68, while South Korea’s Kospi gained 0.3% to 2,865.12.
Hong Kong’s Hang Seng index rose 0.3% to 24,261.26, and the Shanghai Composite in mainland China added 0.1% to 3,403.52. Taiwan’s Weighted Index surged 2.1% to 22,253.46.
Australia’s S&P/ASX 200 also saw gains, increasing nearly 0.9% to 8,588.10.
U.S. Markets Show Mixed Movements
On Monday, the S&P 500 edged up 0.1% to 6,005.88, just 2.3% below its all-time high set in February. The Dow Jones Industrial Average slipped slightly by 1 point to 42,761.76, while the Nasdaq Composite rose 0.3% to 19,591.24.
Trade Talks and Tariff Hopes Boost Markets
The U.S. and China, the world’s two largest economies, are continuing their second day of trade talks following meetings in London. Investors hope the discussions will lead to a deal that reduces the high tariffs imposed during the trade war initiated by former President Donald Trump.
Most tariffs have been suspended to allow trade in various goods, from small tech products to large machinery. The expectation that tariffs will further ease has helped the S&P 500 recover about 20% of its losses from two months ago. The index is now near levels last seen in April, before Trump’s tariff announcements shook markets.
Corporate Deals Drive Market Activity
Some of the day’s biggest market moves came from acquisition announcements.
-
Qualcomm shares jumped 4.1% after agreeing to buy Alphawave Semi for $2.4 billion (€2.1 billion).
-
Quantum computing company IonQ rose 2.7% following its agreement to acquire Oxford Ionics for nearly $1.08 billion (€947.1 million).
On the other hand, Warner Bros. Discovery fell 3% after reversing an early rally. The company announced it would split into two entities: one housing Warner Bros. Television and HBO Max, and the other managing CNN, TNT Sports, and global entertainment and news brands.
Tesla Shares Recover Slightly Amid Tensions
Tesla shares rose 4.6% after recent sharp losses linked to Elon Musk’s strained relationship with former President Trump. The tension could affect Musk’s other ventures, such as SpaceX, which relies on U.S. government contracts. Meanwhile, Rocket Lab, a competitor in the space industry, gained 2.5%.
Bond Yields and Inflation Expectations
The yield on the 10-year U.S. Treasury note fell to 4.48% from 4.51% late Friday. This followed a New York Federal Reserve survey indicating a slight drop in consumer expectations for future inflation in May.
Economists expect a report due Wednesday to show national inflation rising to 2.5% last month, up from 2.3% in April. The Federal Reserve has kept interest rates steady, awaiting clearer inflation trends, especially considering the impact of tariffs. Rising inflation expectations could risk creating a cycle that drives prices higher.
Commodity Prices and Currency Movements
Early Tuesday trading saw U.S. benchmark crude oil prices increase by 31 cents to $65.45 a barrel. Brent crude also rose by the same amount to $67.35 a barrel.
In currency markets, the U.S. dollar strengthened against the Japanese yen, rising to 144.93 yen from 144.61 yen. Conversely, the euro weakened against the dollar, falling from $1.1421 to $1.1399.
Related topics：
