Asian markets rise as US stocks near records on easing trade tensions

Shares rose early Tuesday in Asia after US stock indexes drifted closer to records, while oil prices extended gains.

Beijing and Washington dialled back trade friction as the US extended exemptions for tariffs on some Chinese goods, including solar manufacturing equipment, that US industries rely on for their own production.

The US Trade Representative extended those exemptions, which were due to expire on May 31, by three months through August 31.

Still, China criticised the US on Monday over moves it alleged harmed Chinese interests, including issuing AI chip export control guidelines, stopping the sale of chip design software to China, and planning to revoke Chinese student visas.

 

Make smarter market moves with The Smart Investor. Daily insights on buzzing stocks and actionable information to guide your investment decisions delivered to your inbox.

Subscribe

Hong Kong's Hang Seng gained 1.1 per cent to 23,417.39, while the Shanghai Composite index added 0.3 per cent to 3,356.36.

In Tokyo, the Nikkei 225 advanced 0.6 per cent to 37,683.19. 

South Korean markets were closed for a snap presidential election triggered by the ouster of Yoon Suk Yeol, a conservative who now faces an explosive trial on rebellion charges over his short-lived imposition of martial law in December.

Australia's S&P/ASX 200 was up 0.7 per cent to 8,475.50.

In Taiwan, the Taiex gained 1.4 per cent.

On Monday, US stock indexes drifted closer to their records following a stellar May, Wall Street's best month since 2023.

The S&P 500 rose 0.4 per cent to 5,935.94 after erasing an early loss from the morning. The Dow Jones Industrial Average added 0.1 per cent to 42,305.48. The Nasdaq composite climbed 0.7 per cent to 19,242.61.

Indexes had fallen close to 1 per cent in the morning following some discouraging updates on US manufacturing. President Donald Trump has been warning that US businesses and households could feel some pain as he tries to use tariffs to bring more manufacturing jobs back to the country, and their on-and-off rollout has created lots of uncertainty.

But stocks rallied back as the day progressed. Nvidia climbed 1.7 per cent, and Meta Platforms rose 3.6 per cent, for example.

Oil prices have gained as attacks by Ukraine in Russia raise uncertainty about the flow of oil and gas around the world.

Early Tuesday, US benchmark crude oil was up 62 cents at $63.14 per barrel. Brent crude, the international standard, picked up 57 cents to $65.19 per barrel. 

Markets took in stride fresh salvos between the world's two largest economies, just a few weeks after the United States and China had agreed to pause many of their tariffs that had threatened to drag the economy into a recession.

That followed President Donald Trump's accusation at the end of last week, where he said China was not living up to its end of the agreement that paused their tariffs against each other.

Trump on Friday told Pennsylvania steelworkers he's doubling the tariff on steel imports to 50 per cent to protect their industry, a dramatic increase that could further push up prices for a metal used to make housing, autos and other goods. That helped stocks of US steelmakers climb. Nucor jumped 10.1 per cent, and Steel Dynamics rallied 10.3 per cent.

On the losing side of Wall Street were automakers and other heavy users of steel and aluminium. Ford fell 3.9 per cent, and General Motors reversed by 3.9 per cent.

Lyra Therapeutics soared nearly 311 per cent for one of the market's biggest gains after reporting positive late-stage trial results of an implant to treat chronic sinus inflammation in some patients.

In the bond market, Treasury yields rose as worries continue about how much debt the US government will pile on due to plans to cut taxes and increase the deficit.

The yield on the 10-year Treasury climbed to 4.44 per cent from 4.41 per cent late Friday and from just 4.01 per cent roughly two months ago. That's a notable move for the bond market.

Besides making it more expensive for US households and businesses to borrow money, such increases in Treasury yields can deter investors from paying high prices for stocks and other investments.

Yields had dipped briefly in the morning before rallying back following the updates on manufacturing, which suggested that effects of Trump's tariffs are taking root in the economy.

A report from S&P Global on manufacturing came in better than expected, though uncertainty caused by tariffs has worries high about supplier delays and rising prices.

Also, early Tuesday, the dollar rose to 143.10 Japanese yen from 142.71 yen. The euro slipped to $1.1438 from $1.1443.