Asian stocks rose as traders navigated their way through a US-China trade war and earnings from Wall Street’s big tech companies. Chinese markets were set to reopen on Wednesday.
Shares in Australia and Japan rose along with stock futures for Hong Kong. Contracts for US equities edged lower as Google’s parent Alphabet Inc. and Advanced Micro Devices Inc. tumbled in extended trading. US stock indexes had earlier rebounded after a wave of dip-buying with a Bloomberg gauge of the “Magnificent Seven” megacaps advancing 1.7%. Treasury yields edged higher.
The first volleys in the latest US-China trade war made clear that Xi Jinping is taking a more cautious approach than during Donald Trump’s first term. After the US leader gave last-minute reprieves to Canada and Mexico, his 10% tariffs on China took effect on Tuesday. Beijing swiftly announced additional tariffs on roughly 80 products to take effect on Feb. 10, but traders are hoping upcoming talks will ease tensions.
“There is a reasonable likelihood that the ultimate impact from these tariffs may be less than expected,” said Todd Ahlsten at Parnassus Investments. “These tariffs may also represent the first round of an ultimate negotiation, which could reduce their ultimate impact.”
In Asia, Chinese traders are on tenterhooks ahead of Wednesday’s market reopen as the tariff drama shakes up the investment landscape. Volatility is set to stay high as investors brace for an escalation while also hedging against the odds of a sudden breakthrough. The offshore yuan