Asian markets faced renewed pressure Thursday as investors grappled with escalating U.S. trade tensions, overshadowing another record close for the S&P 500. Japan’s Nikkei 225 plunged 1.2% to 38,678.04, while Hong Kong’s Hang Seng dropped 1.3% after China maintained interest rates to stabilize its currency. Trump’s tariff rhetoric continues destabilizing regional markets, with foreign capital fleeing Chinese assets at the fastest pace this year.
Stephen Innes of SPI Asset Management sounded the alarm:
“The yuan remains under siege, with October’s capital outflows signaling deep market anxiety about prolonged trade wars.”
Wall Street’s resilience contrasted sharply with Asian declines:
- S&P 500: +0.2% (6,144.15)
- Dow Jones: +71 points (44,627.59)
- Nasdaq: +0.1% (20,056.25)
Microsoft powered 30% of the S&P’s gains after unveiling its quantum processing breakthrough, rising 1.3%. Ripple effects from Nikola’s Chapter 11 bankruptcy sparked a 1.8% Tesla rally as competitors exited the EV space. Meanwhile, U.S. housing starts disappointed economists as 7%-plus mortgage rates stifled demand – despite the Fed’s September rate cuts.
Market watchers noted surprising calm in Treasurys, with 10-year yields holding at 4.53% after nearing 4.8% earlier this month. “Investors increasingly believe Trump’s tariffs are negotiation tactics rather than policy commitments,” explained New York analyst Stan Choe.
Energy markets mirrored the global uncertainty with Brent crude holding at $76.03 and WTI dipping to $71.95. Currency traders eyed Japan’s defense of the 150 yen/dollar threshold after USD/JPY briefly broke through critical levels.