Stocks Decline as Trade War Fears Raise Risk Aversion – Asia Market Wrap

US equity-index futures sank, while Asian shares extended losses amid a new round of trade-war stories. The Yen rose, as cryptocurrency prices fell more.

Contracts for the S&P 500 declined 0.5%, while those for the Nasdaq 100 index fell 0.6%, as China retaliated against the US on shipping by placing tariffs on American units of Hanwha Ocean. Asian markets sank 1.1%, with Japan’s Nikkei 225 index down 2.8%. Chinese stocks lost their previous gains, trading 0.1% lower. Futures predicted a worse opening for European markets.

The Yen reversed earlier losses and rose versus the Dollar. Silver reached an all-time high above $52.50, while gold recorded a new high. Treasury yields have pared their gains, with the 10-year yield at 4.04%.

China and the US have been communicating through the economic and trade consultation mechanism, with working-level meetings held on Monday, according to the Chinese ministry of commerce.

Earlier, US’ Bessent stated that he still believes Trump and Xi Jinping will meet. He did, however, warn that all options for retaliation against China’s intention to restrict rare earth exports remain open. China had requested additional consultations to tackle lingering difficulties.

China underlined on Tuesday that its export control mechanisms for rare earth and other related products do not prevent exports, and applications that match the conditions would continue to be accepted.