Asian markets slipped in early trading Wednesday as trade tensions between the U.S. and China rose to the forefront again.
Following reports Monday that trade negotiations could resume soon, President Donald Trump threw water on investors’ optimism Tuesday, saying “We have a long way to go” before any deal. Trump added that he could impose tariffs on another $325 billion of Chinese imports if he wants to.
Separately, amid reports that the Trump administration may soon allow some U.S. companies to resume business with Chinese tech giant Huawei Technologies Co., bipartisan legislation was introduced in the Senate that would block Huawei from being removed from the government’s blacklist without congressional approval.
Japan’s Nikkei NIK, -0.32% retreated 0.4%, and Hong Kong’s Hang Seng Index HSI, -0.30% slid 0.3%. The Shanghai Composite SHCOMP, +0.03% edged down 0.2%. South Korea’s Kospi 180721, -1.07% fell 0.9%, and benchmark indexes in Taiwan Y9999, -0.55% , Singapore STI, -0.07% and Indonesia JAKIDX, -0.31% all declined. Australia’s S&P/ASX 200 XJO, +0.37% was one of the region’s few gainers, rising 0.4%.
Among individual stocks, SoftBank 9984, -2.41% fell in Tokyo trading, along with Fast Retailing 9983, -0.68% and Nintendo 7974, -0.72% . In Hong Kong, Geely Automobile 175, +3.71% rose, while oil producer CNOOC 883, -2.38% and food processor WH Group 288, -1.26% declined. Samsung 005930, -1.39% dropped in South Korea and Taiwan Semiconductor 2330, -1.37% fell in Taiwan. In Australia, BHP BHP, +1.12% and Beach Energy BPT, +1.56% gained while Oil Search OSH, -3.41% fell.
“President Trump’s renewed threat of more tariffs on Chinese goods has investors bracing for weak trading in the Asian session today, tracking the negative sentiment in the U.S. overnight,” ING economists Nicholas Mapa and Prakash Sakpal said in their report.
The S&P 500 SPX, -0.34% fell 10.26 points, or 0.3%, to 3,004.04. That marks the first decline in the benchmark index after five days of gains. The Dow Jones Industrial Average DJIA, -0.09% fell 23.53 points, or 0.1% to 27,335.63. The Nasdaq composite COMP, -0.43% fell 35.39 points, or 0.4%, to 8,222.80.
The latest round of U.S. corporate financial reports ramps up this week and investors have low expectations. Wall Street is forecasting a 2.6% drop in profit for S&P 500 companies. It is set to be the first back-to-back quarterly decline in three years.
Also highly anticipated is the Federal Reserve meeting at the end of the month. Wall Street expects the central bank to raise interest rates to help secure U.S. economic growth threatened by a trade war with China.
Benchmark U.S. crude CLQ19, -0.02% added 2 cents to $57.64 a barrel. It fell $1.96 to settle at $57.62 per barrel Tuesday. Brent crude BRNU19, +0.23% , the international standard, rose 21 cents to $64.56 a barrel.
The dollar USDJPY, -0.03% rose to 108.16 Japanese yen from 107.98 late Tuesday.
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