BANGKOK (AP) After U.S. markets surged to all-time highs despite President-elect Donald Trump’s recent tariff remarks, Asian shares were flat on Wednesday, with Chinese shares leading advances.
The Japanese yen’s sharp increase in value relative to the US dollar caused Tokyo’s Nikkei index to drop 0.8% to 38,134.97. The dollar dropped from 153.08 to 151.59 yen. According to economists, investors are purchasing yen as a safe haven due to uncertainty around the future direction of U.S. trade policy, even though it had recently traded over 155 yen.
If Trump’s promised steep tax increases on imports of products from China, Mexico, and Canada materialize, the world economy might be rocked. All three of the United States’ main trading partners responded sharply to his remarks on Monday.
According to a statement by Stephen Innes of SPI Asset Management, investors, who are already on edge, are acutely aware of the potential repercussions of such drawn-out disagreements, especially on the economies of China and Europe, which are preparing for Trump’s tariff onslaught.
Strong purchases of technology shares drove the advancement of Chinese markets. The Shanghai Composite index increased 1.5% to 3,309.78, while Hong Kong’s Hang Seng rose 2.4% to 19,615.17. Investors may have resumed purchasing in search of deals after prices recently dropped, and a 10% decline in industrial profits may have increased hopes for further government intervention.
People walk past the New York Stock Exchange on Tuesday, Nov. 26 2024. (AP Photo/Peter Morgan)
Associated Press/Peter Morgan photo
Samsung Electronics lost 3.4% as the company announced a change in top management, while South Korea’s Kospi fell 0.7% to 2,503.06.
The business claimed that the purpose of the reorganization, which included making Young Hyun Jun, a Samsung vice chairman who leads its Device Solutions division, CEO, more competitive by concentrating on computer chips.
India’s Sensex surged 0.6%, while Australia’s S&P/ASX increased 0.6% to 8,406.70. The SET in Bangkok fell 0.6%, and Taiwan’s Taiex fell 1.5%.
Investors on Wall Street seemed to ignore the severe trade rhetoric.
The S&P 500 surpassed the record high it reached a few weeks ago on Tuesday, rising 0.6% to 6,021.63. The previous day’s record was surpassed by the Dow Jones Industrial Average, which increased by 0.3% to 44,860.31. With Microsoft and Big Tech leading the way, the Nasdaq composite closed at 19,174.30, up 0.6%.
Trump has frequently defended the use of tariffs, but investors are considering whether his most recent threat is merely a negotiation ploy or if it will become law and have negative effects on markets and the world economy.
“Such tariffs would raise the price of imported items all at once and make households poorer unless the United States can prepare alternatives for the autos, energy products, and other goods that come from Mexico, Canada, and China,” said Carl Weinberg and Rubeela Farooqi, economists at High Frequency Economics.
They would increase consumer inflation by 1%, according to Goldman Sachs.
In addition to hurting American companies’ profit margins, they would increase the risk of retaliatory tariffs from other nations.
Due to the fact that both import cars were built in Mexico, General Motors plummeted 9% and Ford Motor Company fell 2.6%. Modelo and other Mexican beer brands are sold in the US by Constellation Brands, which saw a 3.3% decline. The Mexican peso lost 1.8% of its value in relation to the US dollar.
The Federal Reserve started lowering its main interest rate from a two-decade high a few months ago to help the labor market, but higher prices may force it to postpone its rate decreases. Although they can stimulate the economy, lower interest rates can also increase inflation.
According to a Conference Board survey released on Tuesday, consumer confidence in the United States increased in November, but not as much as analysts had predicted.
After its most recent quarter’s earnings failed to meet analysts’ expectations, Kohl’s stock plunged 17%.Best Buy slumped 4.9% after failing to meet analysts’ forecasts as well.
Stocks in big tech helped support U.S. indexes. Amazon’s 3.2% gain and Microsoft’s 2.2% gain were the two biggest drivers of the S&P 500’s rise.
Early on Wednesday, U.S. benchmark crude oil increased 23 cents to $69.00 a barrel in other transactions. The global benchmark, Brent crude, increased 19 cents to $72.51 a barrel.
The euro increased from $1.0488 to $1.0511.
The Associated Press, 2024. All rights reserved. All rights reserved. It is prohibited to publish, broadcast, rewrite, or redistribute this content without authorization.
Note: Every piece of content is rigorously reviewed by our team of experienced writers and editors to ensure its accuracy. Our writers use credible sources and adhere to strict fact-checking protocols to verify all claims and data before publication. If an error is identified, we promptly correct it and strive for transparency in all updates, feel free to reach out to us via email. We appreciate your trust and support!