On Monday, Asian shares were mostly lower. With the March deadline for new tariffs on autos and auto-parts producers approaching, the Trump administration intensified pressure on trading partners to conclude new deals. Don’t miss out on this Wednesday’s big deadline. It signals an end to the 90 day mutual moratorium on reciprocity tariffs that President Trump negotiated with non-China trading partners. Investors are still on their toes, expecting the possibility of significant market fluctuations as the deadline draws near.
Japan’s Nikkei 225 index slipped by 0.5%, closing at 39,628.41. In Hong Kong, the Hang Seng index fell 0.4% to 23,824.18, and South Korea’s KOSPI index was down 0.1% to 3,053.55. China’s Shanghai Composite Index fell by 0.2% to end at 3,464.78. In other parts of the Asia-Pacific, Australia’s S&P ASX 200 fell 0.3% to close at 8,576.
The oil market reacted immediately to the news. Brent crude, the international benchmark, was down 96 cents, ending at $67.65 a barrel. This decrease came on the heels of OPEC+’s decision on Saturday to increase production by 548,000 barrels per day beginning in August.
Market observers note that the fluctuations in Asian markets mirror the uncertainty surrounding U.S. trade policies. Stephen Innes, managing partner at SPI Asset Management, commented on the situation, stating:
“With the July 9 tariff deadline fast approaching, all eyes are trained on Washington, scanning for signs of escalation or retreat. The path forward isn’t clear, but the terrain is littered with risk.”
Turning to the currency market, the euro lost ground versus its dollar counterpart, falling to $1.1772 from $1.1779. The U.S. dollar weakened against the Japanese yen, decreasing to 144.77 from 144.44 previously.
Unlike the Asian markets, all major U.S. indices ended the day in positive territory. The Dow Jones Industrial Average closed up 344 points, or 0.8%, and the tech-heavy Nasdaq composite was 1% higher. The S&P 500 notched an all-time high for the fourth time in five days, climbing 0.8%.
Market analysts from Nomura Group expressed their expectations regarding potential market volatility in the lead-up to the tariff deadline, emphasizing the significance of upcoming negotiations:
“We expect markets to be volatile into the 9-July deadline when the 90-day pause on President Trump’s reciprocal tariffs expires for non-China trading partners.”
