On Monday, Asian stock markets showed positive dynamics following U.S. President Donald Trump's decision to delay tariff increases on Chinese goods.
Asia's markets react to tariff decisions
Japan’s Nikkei 225 rose 2.6%, reaching a new record of 42,942.14. Major firm stocks, such as Toyota, climbed 3.3%. Meanwhile, Hong Kong’s Hang Seng fell 0.2% to 24,865.07, while the Shanghai Composite rose 0.3% to 3,658.62.
The market gains followed a Monday executive order from Trump that temporarily halted escalation between the two largest economies, creating an opportunity for broader negotiations. Without the delay, duties on Chinese imports could have surged to an already steep 30%. Beijing indicated it would match Washington’s extension by postponing its own tariff increases on U.S. goods.
State of the U.S. stock markets
In the U.S., stocks dipped on Monday as investors awaited new inflation figures. The S&P 500 fell 0.3% to 6,373.45, the Dow declined 0.5% to 43,975.09, and the Nasdaq lost 0.3% to 21,385.40.
This week’s marquee release in the U.S. arrives Tuesday with July’s consumer price index. Economists expect a 2.8% year-over-year rise in prices, above June’s 2.7%.
Currency fluctuations and their impact
The dollar is holding its gains with the dollar index at 98.497. The dollar ticked up 0.1% to ¥148.28, while the euro held near $1.1615. Traders largely took the tariff move in stride as a three-month extension was widely expected.
A U.S. official told Reuters that chip makers Nvidia and AMD agreed to allocate 15% of their China-related sales revenue to the U.S. government in exchange for export licenses for certain semiconductors. This underscores how trade and tech policy remain intertwined despite the truce.
The delay in higher tariffs afforded negotiators a window to pursue further talks, while businesses still face planning uncertainty. Investor attention now shifts to upcoming inflation data and the potential impact of these recent decisions on the economic landscape.
