On Tuesday, investors were cashing out and taking profits, sending U.S. stock markets down by more than 2%. The Dow declined 119.07 points, or 0.29%, to finish at 41,249.38. The S&P 500 fell modestly by 0.07%, closing at 5,659.91. At the same time, the Nasdaq Composite ended just shy of flat at 17,928.92. This decline came even though optimism was increasing over trade talks between the U.S. and China.
Asia-Pacific markets were looking at a more positive picture. This encouraging news followed closely on the heels of signs of potential thaw in the U.S.-China trade war. Japan’s Nikkei 225 index gained 0.36%, while the broader Topix index climbed 0.19%. South Korea’s Kospi index gained 0.67%, and Australia’s S&P/ASX 200 rose by 0.3%. Hong Kong’s Hang Seng index was at 22,761 — a sign of the regional optimism.
Scott Bessent, U.S. Treasury Secretary for International Affairs, said he was optimistic about the ongoing trade talks. He said they created “just a ton” of productivity. Investors could relate deeply to this feeling. American futures leapt in reaction to the news, signaling their bullishness at the prospect of learning more about the trade deal.
Chinese Vice Premier He Lifeng got in on the act, too, labeling the developments “good news for the world.” His comments highlight the broader implications of the negotiations not only for the U.S. and China but for global economic stability.
The diverging fortunes of the U.S. and other Asia-Pacific markets highlight a critical inflection point for U.S. global leadership in many areas – not least international relations and economic policy. U.S. investors largely retreated in response to volatility in their own domestic market. By contrast, their Asian peers adopted a far more optimistic outlook on the easing of trade hostilities.