Singapore — Asian stocks stumbled on Tuesday as signs the US and China were preparing for trade talks later this month were tempered by uncertainty over whether the two nations could strike a durable deal.
Early gains for MSCI’s broadest index of Asia-Pacific shares outside Japan and the S&P 500 futures petered out to trade flat. Markets had earlier joined the rebound from Monday’s cash session after US treasury secretary Scott Bessent said US President Donald Trump remained on track to meet Chinese leader Xi Jinping in South Korea in late October.
Wall Street’s main indices ended as much as 2.2% higher overnight, led by chipmakers, after Trump struck a more conciliatory tone on trade tensions with China.
Global equities had abruptly turned red on Friday after Trump announced 100% tariffs on China, reviving memories of the market volatility after April's “Liberation Day” announcement. The sell-off only halted after the US president cooled his rhetoric on his Truth Social network.
Citi analysts wrote in a research report that they did not expect an escalation of trade tension between Beijing and Washington.
“The reason is not so much the reassuring President Trump tweet over the weekend, but the fact that China may be the only country with bargaining power, where the US may have to be more flexible in its negotiation stance.”
But a spokesperson for China’s commerce ministry said on Tuesday the US could not seek talks while also making threats, keeping markets on edge over the chances for a broader trade deal.
The US and China will begin charging port fees today on ocean shipping firms that move everything from holiday toys to crude oil, making the high seas a key front in the trade war between the world’s two largest economies.
After early gains in Hong Kong, the Hang Seng index fell 0.4%, while in the mainland, the CSI 300 gauge of blue-chip Chinese stocks slipped 0.1%.
Asian stocks were led by a 0.8% surge in Taiwan’s market as TSMC rose to a record, after OpenAI said it had partnered with Broadcom to produce its first in-house artificial intelligence processors.
South Korea’s Kospi index gained 0.6% on Tuesday after Samsung Electronics projected a 32% rise in third-quarter operating profit from a year earlier, beating analysts’ estimates as demand for conventional memory chips helped offset the company’s weaker high bandwidth memory chip sales.
Japan’s Nikkei stock index fell 1.2% as the country’s markets reopened after a holiday. Against the yen, the dollar was little changed at ¥152.31.
The dollar index, which measures the greenback’s strength against a basket of six currencies, was trading 0.1% lower at 99.246.
Traders continue to expect easing from the US Federal Reserve later this month. Pricing of Fed funds futures implies a 96.7% probability of a 25-basis-point cut to interest rates at the US federal open market committee’s meeting on October 29, compared with a 98.3% chance a day earlier, according to the CME Group’s FedWatch tool.
The euro was barely moved at $1.1571 after French President Emmanuel Macron rejected calls to resign on Monday, as his latest government was threatened by two no-confidence motions that could bring it down by the end of the week.
Brent crude was last up 0.2% at $63.45 per barrel after an Opec report on Monday showed world oil supply was expected to closely match demand next year as the wider Opec+ group increased production, marking a change from last month’s outlook, which projected a supply shortfall in 2026.
Gold gained 1.1% to $4,155.90/oz, showing little sign of pausing for breath as precious metals continue to set records.
Bitcoin fell 1.9% to $113,629.29, while Ether slipped 3% to $4,161.79.
Reuters
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