Asian stock markets were reeling Wednesday, following a record plunge on Wall Street. Analysts pointed out that the United States’ recent trade agreement with Japan has eased some of these concerns. In particular, tariffs on Japanese imports were reduced to 15%, a considerable decrease from the 25% initially threatened. This turn of fate has greatly improved the fortunes of Japanese manufacturers and other exporters.
Besides the relief about the trade pact, Asian shares floundered. Tokyo’s Nikkei 225 index dropped by 1.3% to finish at 50,168.11. Hong Kong’s Hang Seng index dropped by 1.3%, closing at 25,628.88. At the same time, the benchmark Shanghai Composite index fell 0.6% and closed at 3,867.92. South Korea’s Kospi dropped 1.8% to 4,090.59, and Taiwan’s benchmark saw a loss of 1.2%. In Australia, the S&P/ASX 200 lost 0.7% to end at 8,640.60.
After a broadly negative day across all major indices on Wall Street, Asian markets opened and fell steeply. The S&P 500 pulled back by 1.1%, putting in its weakest day in three weeks immediately following an all-time high. In contrast, European markets showed resilience. Germany’s DAX rose by 0.3% to 24,254.58, while France’s CAC 40 increased by 0.8% to 8,131.56. Britain’s FTSE 100 gained 0.6%, finishing at 9,711.10.
That’s because retail sales in Japan have been surprisingly strong. They increased by 4% from January through November this year, compared to the same period last year. Industrial production jumped by 4.8%, pointing to some resilience in the factory sector even as macroeconomic headwinds weigh down most major markets. Investment in future fixed assets, such as factory equipment and infrastructure, has plummeted. In November, it was down 2.6% YoY, and it was down 11.1% in the first eleven months of this year.
Analysts express cautious optimism regarding the potential for recovery in the coming months, though they remain aware of ongoing challenges. Zichun Huang, an analyst, stated:
“Policy support should help drive a partial recovery in the coming months, but this probably won’t prevent China’s growth from remaining weak across 2026 as a whole.”
4–10, On the corporate front, the biggest gainers and losers were all technology companies. Broadcom on Thursday posted stronger-than-expected quarterly profits, but its stock tumbled by 11.4%, as the company’s prospects were overwhelmed by the larger market’s shaking nerves.
Futures on the S&P 500 Index and Dow Jones Industrial Average both surged 0.4%, indicating a strong start to the week. All signs point to a positive rebound in U.S. markets as investors absorb new information and developments.
