Asian stocks advance amid quiet holiday trading

Asian share prices moved higher on Thursday, one of the few trading days open in the region, while most markets observed the Labor Day holiday. Investors took their cue from Wall Street, where US stocks recovered from massive early losses to mark gains for the seventh day straight.

Despite the ongoing uncertainty of President Donald Trump’s trade fight with China and other partners, Japan’s Nikkei 225 advanced 1.31% to 36,516. Traders digested the Bank of Japan’s decision to leave its benchmark rate untouched, even as questions grow over how new and proposed U.S. tariffs could ripple through the world’s third-largest economy.

Australia’s S&P/ASX 200 inched up less than 0.1%, finishing at 8,137.40. With China, South Korea, Hong Kong, Singapore, and much of Southeast Asia closed for the May 1 break, turnover across the region stayed light and cross-border flows were thin, leaving sentiment heavily reliant on headlines from Washington and New York.

Asian stocks were heavily reliant on news from NY

On Wednesday, the S&P 500 edged up 0.1% to 5,569.06, the Dow Jones Industrial Average rose 0.3% to 40,669.36, and the tech-focused Nasdaq Composite slipped 0.1% to 17,446.34.

It was a significant reversal after the S&P 500 dropped by 2.3% and the Dow cut 780 points in early trading. The early sell-off came after preliminary figures hinted that the US economy shrank in the first quarter, a stark reversal from the solid growth recorded late last year.

Economists said many importers had rushed shipments ahead of expected tariff increases, distorting the numbers and igniting talk of “stagflation.” A combination of weak activity and stubborn inflation leaves the Federal Reserve with no easy response.

Relief arrived later in the day when a separate report showed the Fed’s preferred inflation gauge slowed to 2.3% in March from 2.7%  in February, moving nearer to the 2% target. 

The tariff dispute itself remains the wild card. Companies are struggling to predict costs as the administration shifts between announcing tariffs and hinting at rollbacks. “I’m not taking credit or discredit for the stock market,” Trump said Wednesday. “I’m just saying we inherited a mess.”

The back-and-forth has already caused a lot of volatility in the market. During April, the S&P 500 briefly fell almost 20% below the record it set earlier this year, drawing comparisons with some of the darkest days of the Great Depression. The S&P 500 finished the month down only 0.8%, far milder than March’s drop, and now sits 9.4% beneath its peak.

U.S. benchmark crude, on the other hand, slipped 10 cents to $58.11 a barrel, while Brent crude eased 5 cents to $61.01. In currencies, the dollar strengthened to 143.88 yen from 143.06 yen, and the euro slipped to $1.1308 from $1.1331.

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