Asian Shares Decline Despite Wall Street Rebound as Trade War Concerns Persist

Asian shares fell as investors awaited next moves in trade wars, while Wall Street saw a slight rebound due to a positive inflation report. Trade war impacts continue.

Asian Shares Decline Despite Wall Street Rebound as Trade War Concerns Persist

Asian shares were mostly lower on Thursday, despite a notable rebound on Wall Street, which was driven by an encouraging update on U.S. consumer prices. U.S. futures showed declines, and oil prices remained largely unchanged. Investors in Asian markets are keeping a close eye on President Donald Trump’s next steps in the ongoing trade war, which has contributed to the global market uncertainty.

Trade War Worries Weigh on Chinese Markets

Chinese markets saw a decline as concerns about the next phase of Trump’s trade policies weighed on investor sentiment. The Hang Seng index in Hong Kong shed 0.7% to 23,426.80, while the Shanghai Composite index lost 0.4% to 3,357.02. These losses reflect ongoing anxiety regarding the trade conflict between the U.S. and China, especially as tariffs and trade restrictions continue to affect global markets.

In Japan, the Nikkei 225 saw a modest gain of 0.5%, reaching 37,014.82. On the other hand, South Korea’s Kospi edged lower by 0.1% to 2,573.05, while Australia’s S&P/ASX 200 dropped by 0.4% to 7,756.10. Taiwan’s Taiex and Bangkok’s SET both saw slight declines as well. Meanwhile, India’s Sensex gained a small 0.1%, showing a relatively more stable performance compared to other Asian markets.

U.S. Wall Street Rebounds: Inflation Report Shows Less-than-Expected Price Increases

On Wednesday, Wall Street’s major indices saw a mixed session. The S&P 500 gained 0.5% to 5,599.30, after bouncing between early gains and a later loss. The Dow Jones Industrial Average ended the day down by 0.2%, closing at 41,350.93, while the Nasdaq composite rose 1.2% to 17,648.45. This rebound was driven by a U.S. inflation report that revealed lower-than-expected consumer price increases, which raised hopes that inflation may be under control.

Despite some optimism, many U.S. stocks are still feeling the effects of the trade war. Companies in the artificial intelligence (AI) sector, however, led the gains. Nvidia, which had been struggling, saw a 6.4% increase, reducing its loss for the year to 13.8%. Other AI-related companies such as Super Micro Computer and GE Vernova also saw positive movement, as investors regained confidence in the sector following recent fears of overvaluations.

However, companies in sectors directly impacted by tariffs, like Brown-Forman (the maker of Jack Daniel’s whiskey) and Harley-Davidson, faced significant losses. Brown-Forman tumbled 5.1%, while Harley-Davidson fell 5.7%. These declines highlight how trade tensions continue to hurt businesses that rely on global trade and exports.

The Ongoing Impact of Tariffs on U.S. Economy and Consumer Sentiment

The ongoing trade war, fueled by Trump’s tariffs on steel and aluminum, is causing significant uncertainty in the U.S. economy. The European Union and Canada have retaliated with their own tariffs on U.S. products, including motorcycles and bourbon. This back-and-forth has raised concerns about the potential long-term effects of tariffs on both businesses and consumers. European Union President Ursula von der Leyen remarked that tariffs “are taxes” and that they “are bad for business, and worse for consumers.”

Uncertainty Over Trump’s Tariff Policies Weighs on Investor Confidence

A key question on Wall Street is how much pain Trump will allow the U.S. economy to endure through these tariffs and trade policies. The constant changes in tariff announcements, with policies being altered or reversed unexpectedly, have led to a loss of confidence among both U.S. consumers and businesses. This uncertainty could result in reduced spending, which in turn may hurt economic growth in the U.S. Several businesses, such as Delta Air Lines, have already reported weakened demand as a result of this uncertainty.

Wednesday’s inflation report also highlighted concerns that rising tariffs will push prices higher as U.S. importers pass on the additional costs to customers. This could exacerbate inflationary pressures, potentially undermining the Federal Reserve’s efforts to stabilize the economy. The report could also influence future interest rate decisions, as the Fed has been cautious in cutting rates further due to concerns about stubborn inflation.

In early Thursday trading, U.S. benchmark crude oil dropped slightly by 11 cents to $67.57 per barrel, while Brent crude, the international standard, fell by 5 cents to $70.90 per barrel. The U.S. dollar weakened against the Japanese yen, dropping from 148.25 yen to 147.88 yen, while the euro saw a slight rise to $1.0889.