Asian markets dipped as early optimism over U.S. trade deals faded

Asian stocks eased on Tuesday as much of the earlier optimism over President Donald Trump’s proposed tariff pact with Japan, soon followed by an agreement with EU, began to fade. Investors appeared to pause after a week of rapid policy developments.

Trading was subdued across the region as investors digested mixed signals. Japan’s Nikkei 225 fell 0.88% to end at 40,636.17, while S&P/ASX 200 in Australia slipped 0.13% to 8,686.20.

South Korean Kospi recovered from early losses to inch up by lower than 0.1% at 3,212.59. In mainland China and Hong Kong, the Hang Seng lost 1.1%, closing at 25,276.36, and the Shanghai Composite declined 0.3% to 3,586.93.

Market watchers said attention has shifted to ongoing talks between the United States and China. Scott Bessent and Lifeng, Chinese Vice Premier, met in Sweden this week to discuss trade.

Bessent has indicated that current tariff levels are likely to be extended, but after the first day of negotiations there were no significant breakthroughs. The meeting in Sweden is one in a series of high‑level discussions aimed at defusing the U.S.‑China trade conflict.

Last week, Donald Trump unveiled a framework that would place a 15% levy on Japanese imports, down from the 25% he had earlier threatened.

He also stated that Japan would commit to investing $550 billion in the U.S. economy and agree to greater access for American carmakers and rice exporters. While many specifics remain unclear, the announcement offered a brief lift to stocks at the time.

US stocks mostly remained flat

In the United States on Monday, stocks remained in a quiet session after Washington agreed to impose a 15% tariff on automotives and other goods from the EU, a rate below previous threats. Wall Street now faces a week filled with potential flashpoints, notably the Federal Reserve’s interest‑rate decision on Wednesday.

Investors generally expect the Fed to hold rates steady and defer cuts until September, though a few of Trump’s appointees could press for an earlier move. The central bank has kept rates unchanged this year after several cuts in late 2024.

S&P 500 remained almost flat on Wall Street, rising less than 0.1% to 6,389.77, marking its sixth consecutive record close. The Dow Jones Industrial Average lowered by 0.1% to reach 44,837.56. At the same time, the Nasdaq Composite edged up by 0.3% to reach 21,178.58.

Stocks of Tesla rose about 3% after CEO Musk said the electric car maker signed an agreement with Samsung, possibly worth over $16.5 billion to supply computer chips. Samsung’s stocks in Seoul jumped 6.8%. Other AI and chip names also climbed: Advanced Micro Devices gained 4.3% and Super Micro Computer rose 10.2%, following last week’s boost from Alphabet’s $85 billion AI investment plan.

In commodities trading, benchmark U.S. crude oil edged up 1 cent to $66.72 per barrel, while Brent crude, the international benchmark, added 6 cents to $70.10. In foreign exchange markets, the U.S. dollar strengthened to 148.56 Japanese yen from 148.54, and the euro rose to $1.1600 from $1.1593.