Asian shares rallied on Thursday following a rebound in Wall Street after President Donald Trump eased some tariff pressures. U.S. futures remained stable, while Japan and China saw significant gains. Trump’s decision to grant a one-month exemption to U.S. automakers from tariffs on Mexican and Canadian imports sparked optimism of avoiding a damaging trade war. The Nikkei 225 surged by 0.9%, with Japanese automakers’ shares rising in U.S. trading. Hong Kong’s Hang Seng index also soared by 2.6%, driven by Beijing’s commitment to boost domestic demand.
Conversely, Australia’s S&P/ASX 200 slipped by 0.5%, while Taiwan’s Taiex and Bangkok’s SET both experienced losses. On Wall Street, Ford Motor and GM stocks contributed to the market’s upturn, with the S&P 500, Dow Jones, and Nasdaq all posting gains. Trump’s temporary exemption for automakers alleviated concerns of increased costs for companies and households.
Despite this, Trump maintained tariffs on other trading partners, including China, causing market uncertainty. The threat of tariffs has negatively impacted consumer confidence and business growth, with concerns of potential stagflation looming. Reports on the U.S. economy provided mixed signals, with ADP indicating a slowdown in hiring and the services sector facing chaos and uncertainty due to tariffs.
Amid these developments, U.S. manufacturers are wary of stagnating growth. The possibility of stagflation poses a significant challenge, as the economy faces the prospect of slowing down while inflation remains high. The Fed may need to navigate carefully to balance economic growth and inflation in the face of ongoing tariff pressures. Oil prices rose, and currency markets saw movements, reflecting the market’s response to evolving trade dynamics.
