Asian Stocks Slip as Trade Optimism Fades; Fed and Tech Earnings in Focus – Asia Market Wrap

Asian stocks slipped for a third day as momentum from recent trade deals lost traction and investors remained cautious in a week packed with economic data and corporate earnings.

The MSCI Asia-Pacific gauge dropped 0.8%, led by shares in Hong Kong. The dollar steadied after climbing the most since May. Futures for the S&P 500 edged up 0.1% after the index was little changed Monday, but still closed at a record high. Contracts for European stocks rose 0.2%. The euro edged lower after sliding the most in over two months in the prior session.

Optimism from recent tariff deals is fading, with investors turning their attention to a slate of key indicators – from jobs and inflation to broader economic activity. The spotlight will fall on the Federal Reserve’s policy decision Wednesday, where officials are expected to hold rates steady, followed by earnings from four megacap tech companies.

European capitals defended the trade deal struck with Trump while industry officials in Germany warned that the deal leaves the auto industry exposed and will make companies in Europe less competitive. Dutch minister for foreign trade said the agreement was “not ideal” and called on the commission to continue negotiations with the US.

Meanwhile, US and Chinese officials finished the first of two days of talks aimed at extending their tariff truce beyond a mid-August deadline and hashing out ways to maintain trade ties while safeguarding economic security.

The US will need more negotiations with India for an agreement, US Trade Representative Jamieson Greer said.

The key for markets this week is a rate decision by the Fed. The Bank of Japan is also meeting for its policy decision.