Asian stock markets made modest gains on Tuesday as investors focused on renewed trade negotiations between the United States and China in London, hoping the discussions could ease economic tensions and avert a potential global recession.
Japan’s Nikkei 225 rose 0.9% to 38,445.68, while South Korea’s Kospi increased by 0.3% to 2,865.12. In Hong Kong, the Hang Seng index climbed 0.3% to 24,261.26. China’s Shanghai Composite inched up 0.1% to 3,403.52, and Taiwan’s Taiex surged by 2.1% to 22,253.46. Australia’s S&P/ASX 200 also advanced nearly 0.9%, closing at 8,588.10.
The renewed dialogue between the world’s two largest economies, now into its second day in London, has sparked optimism that a deal may be reached to reduce high tariffs that have strained global trade. Most tariff increases introduced during former U.S. President Donald Trump’s trade war have been paused, allowing the flow of goods from electronics to heavy machinery to continue.
On Wall Street, the S&P 500 inched up 0.1% to 6,005.88, bringing it within 2.3% of its February record. The Dow Jones Industrial Average dipped by a single point to 42,761.76, while the Nasdaq Composite added 0.3% to reach 19,591.24. The S&P 500 has largely recovered from a sharp 20% decline seen two months earlier following a surprise tariff announcement on what was dubbed ‘Liberation Day.’
Corporate deals also influenced market movements. Qualcomm jumped 4.1% after confirming its $2.4 billion acquisition of Alphawave Semi. IonQ gained 2.7% following news of its nearly $1.08 billion purchase of Oxford Ionics, a fellow quantum technology firm.
Meanwhile, Warner Bros. Discovery dropped 3% after reversing early gains. The company announced plans to split into two entities, one managing entertainment properties such as HBO Max and Warner Bros. Television, and another overseeing news and sports assets like CNN and TNT Sports, along with associated digital products.
Tesla rebounded 4.6% after a volatile session, recouping some of its recent losses triggered by tensions between CEO Elon Musk and Donald Trump. Analysts warn that the strained relationship could affect Musk’s government-linked ventures, including SpaceX. In contrast, Rocket Lab, another space firm, gained 2.5% amid speculation it could benefit from any fallout.
In the bond market, the yield on the 10-year U.S. Treasury slipped to 4.48% from 4.51% late Friday. The dip followed a New York Federal Reserve survey showing a slight decrease in consumer inflation expectations for May.
Markets now await Wednesday’s inflation report, expected to show a national increase to 2.5% from 2.3% the previous month. The Federal Reserve has held interest rates steady, assessing the impact of tariffs on inflation trends. Economists caution that rising inflation expectations could fuel a cycle of further price hikes.
In energy trading, U.S. benchmark crude rose by 31 cents to $65.45 per barrel, while Brent crude climbed to $67.35. Currency markets also saw movement, with the dollar strengthening to 144.93 yen from 144.61, and the euro dipping slightly to $1.1399 from $1.1421.
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