Asian markets traded mostly lower on Thursday, even as the S&P 500 extended its record-setting rally on Wall Street. Investors in the region remained cautious, with concerns over U.S. tariff policies and China’s economic stability weighing on sentiment.
Asian Markets Struggle Amid Uncertainty
Major indexes in Asia saw declines in early trading:
- Japan’s Nikkei 225 dropped 1.5% to 38,579.71.
- Australia’s S&P/ASX 200 slid 1.4% to 8,297.60.
- South Korea’s Kospi lost nearly 0.5%, closing at 2,659.22.
- Hong Kong’s Hang Seng fell 1.6% to 22,569.12.
- Shanghai Composite edged down 0.2% to 3,345.52, following China’s decision to leave its benchmark interest rate unchanged to maintain financial stability.
“The yuan has been under siege, with foreign-exchange outflows surging last month as Trump’s tariff rhetoric sent shockwaves through markets,” said Stephen Innes, managing partner at SPI Asset Management.
Wall Street Holds Strong Despite Global Concerns
In contrast, U.S. markets continued their upward momentum:
- S&P 500 added 0.2%, reaching another all-time high at 6,144.15.
- Dow Jones Industrial Average climbed 71 points (0.2%) to 44,627.59.
- Nasdaq composite inched up 0.1% to 20,056.25.
Tech Stocks Lead the Rally
- Microsoft (+1.3%) fueled the S&P 500’s rise after announcing its development of the world’s first “quantum processing unit,” which could revolutionize computing.
- Tesla (+1.8%) gained after Nikola (a rival electric truck maker) plunged 39.1% upon filing for Chapter 11 bankruptcy protection.
Economic Data: Housing Market Weakens
A report on U.S. home construction showed that fewer houses were built last month than economists expected.
- High mortgage rates continue to pressure the housing market, despite Federal Reserve rate cuts in September aimed at easing economic conditions.
Bond Market and Tariff Fears
The 10-year Treasury yield eased slightly to 4.53%, down from 4.55% on Tuesday.
- While Trump’s tariff threats initially rattled markets, investors now believe they may be a negotiating tactic rather than a long-term economic risk.
Commodities & Currency Markets
- Oil Prices:
- U.S. crude fell 32 cents to $71.93 per barrel.
- Brent crude lost 21 cents, trading at $75.83 per barrel.
- Currency Markets:
- The U.S. dollar slipped to 150.60 yen (from 151.37 yen).
- The euro edged up to $1.0432 (from $1.0428).
Market Outlook: Investors Remain Cautious
Despite record highs in U.S. markets, Asian investors remain on edge due to global trade tensions, China’s economic policies, and concerns over inflation. While tech giants like Microsoft and Tesla continue to fuel optimism, regional markets may remain volatile as they react to policy changes and economic data in the coming weeks.
