Gold Increases & Stocks Decline as Trade Tensions Reduce Risk – Asia Market Wrap
Asian equities fell along with US stock-index futures as trade tensions escalated, urging investors to avoid riskier wagers. Gold climbed in response to increased demand for safe haven assets.
Contracts for the S&P 500 sank 0.6%, while those for European equities declined 0.5%. Last month, China and the US accused each other of breaking their trade pact, sending Hong Kong stock prices down 1.7%. Trump also stated that he will increase tariffs on steel and aluminium imports. The 10-year Treasury yield jumped two basis points, to 4.42%.
The Dollar index fell 0.2%, while the Yen gained. Crude oil rose 2.8% as geopolitical and trade risks grew, and OPEC+ expanded production less than expected. Gold rose 1%.
Tariff stories are once again dominating markets following a legal back-and-forth last week about the status of Trump’s century-high tariffs, which investors fear may force the US into a recession. Amid the uncertainties surrounding US trade policy and negotiations with nations such as China, market participants are also keeping an eye on a massive tax plan that threatens to increase the US deficit.
Meanwhile, Asian steel and aluminium stocks fell sharply as Trump announced plans to raise steel and aluminium tariffs to 50% from 25%.
