Asian Shares Bounce Back After Wall Street Gains Amid Tariff Concerns

BANGKOK (AP) — Asian stocks showed a positive trend on Tuesday, recovering after the fluctuations seen in U.S. markets. The rise in Asian shares follows President Donald Trump’s upcoming “Liberation Day” occurring on Wednesday, which has led to significant movement in stock markets across the globe.

As expectations increase, many investors are turning towards safer assets amid economic uncertainties. On Tuesday morning, gold prices climbed to $3,172.80 per ounce, indicating a shift towards secure investments.

In Japan, the Nikkei 225 index gained a slight 0.1%, reaching 35,663.86 points. Prime Minister Shigeru Ishiba expressed his concerns to Trump regarding potential increases in auto tariffs on Japan, an important ally of the U.S. Additionally, a recent survey from the central bank indicated a decline in business sentiment among major manufacturers.

Meanwhile, Hong Kong's Hang Seng index rose 1.1% to 23,363.96, and China's Shanghai Composite increased by 0.6% to 3,355.31 points. South Korea's Kospi index saw a notable jump of 1.8%, reaching 2,525.44 points, and Australia's S&P/ASX 200 climbed 1% to 7,919.50 points. Taiwan's Taiex surged by 2.6%, contrasting with India's Sensex, which experienced a slight decline of 0.2%. Thailand's SET index advanced by 1.1%.

On the U.S. side, Monday’s activities showed that the S&P 500 climbed 0.6% to 5,611.85, but ultimately faced a 4.6% loss for the first quarter, marking the worst quarterly performance in two-and-a-half years.

The Dow Jones Industrial Average saw a gain of 1%, closing at 42,001.76, but the Nasdaq composite dipped by 0.1% to 17,299.29, primarily dragged down by losses in big tech companies like Tesla and Nvidia.

The recent volatility in the stock market stems from growing uncertainties surrounding the upcoming tariffs that Trump promises will bring back manufacturing jobs to the U.S. The anticipated tariffs are referred to as “reciprocal”, aiming to counterbalance what Trump perceives as unfair burdens from other countries, including value-added taxes.

Goldman Sachs economists predict that Trump may announce an average reciprocal tariff of about 15%. Moreover, they have adjusted their inflation outlook upwards while lowering their growth projections for the U.S. economy by the end of the year.

They estimate a 35% probability of recession within the next year, against a prior forecast of 20%. This shift reflects concerns over diminished growth and confidence levels, compounded by statements from officials indicating a willingness to endure economic challenges.

Should the tariffs announced on April 2 come out less severe than expected—perhaps without new tariffs on China—stocks may respond positively. However, if fears materialize and businesses react cautiously, the result could lead to job cuts and further declines in stock values.

Even if the tariffs are not as damaging as anticipated, the lack of clarity could result in U.S. consumers and businesses holding back on their spending, ultimately impeding economic growth.

Tesla shares fell by 1.7% on Monday, marking a substantial 35.8% decline in value for the year so far, making it one of the poorer performers in the S&P 500 list. Concerns over the company's brand becoming overly tied to its CEO Elon Musk are prominently cited among investors.

On a positive note, Mr. Cooper Holdings saw its stock jump by 14.5% after the home loan servicer announced it was being acquired by Rocket Companies in a $9.4 billion all-stock deal. This occurs shortly after Rocket's acquisition of real estate company Redfin.

Additionally, Warren Buffett’s Berkshire Hathaway gained 1.2%, contributing positively to the S&P 500. In an intriguing market move, the stock of news outlet Newsmax skyrocketed 735% on its first trading day, leading to numerous trading halts due to its volatility.

Looking at early trading on Tuesday, U.S. benchmark crude oil increased by 17 cents to $71.65 per barrel, while Brent crude saw a rise of 19 cents, reaching $74.96 per barrel. The value of the dollar slightly fell to 149.57 Japanese yen from 149.97, while the euro increased to $1.0825 from $1.0817.

With uncertainty looming, investors remain cautiously optimistic as they navigate the potential impacts of new tariffs on economic conditions and stock market performance.

Asian, Stocks, Tariffs