Synopsis
Asian stocks fell as new tariff concerns emerged following President Trump’s threat to impose tariffs on South Korean goods. The yen maintained its gains, while the Kospi index fell and the South Korean won weakened. Investors await tech benefits from mega-caps to gauge the sustainability of the AI-driven rally.
TIL CreationsIn the United States, companies representing about a third of the S&P 500’s market capitalization are reporting this week.
Asian stocks fell slightly as pricing concerns resurfaced after President Donald Trump threatened to increase taxes on South Korean goods. The yen maintained its gains.
The Kospi index, one of the world’s best-performing benchmarks this year, fell 0.9%, while the South Korean won weakened after four days of gains. Japanese stocks fell for a second day, weighed down by a stronger yen.
The yen was trading around 154 per dollar after rising against the greenback over the past two sessions, amid speculation that the United States could coordinate its intervention with Japan. The dollar gauge was stable on Tuesday, hovering around levels last seen in 2022. Gold and silver also traded near their record highs on Tuesday.
Although the market’s focus has been primarily on currencies and the risk of intervention in the yen, tariff concerns also resurfaced after Trump warned of 100% levies on Canada. Additional uncertainty comes in pivotal week for investors, with mega-caps technological gains The goal is to test whether the artificial intelligence-driven rally can be sustainable.
“Technology has become more of a demonstration story,” said Darrell Cronk, chief investment officer for wealth and investment management at Wells Fargo, which manages $2.3 trillion. “If Big Tech can continue to deliver on its promises, I think capital will start flowing into the tech direction again.”
In the United States, companies representing about a third of the S&P 500’s market capitalization are reporting this week.
The American president has intensified trade tensions with several allies in recent weeks, threatening to increase customs duties on Canadian products to 100% if Ottawa signs a trade agreement with China. Trump blamed a 25% tariff hike on South Korean goods on the country’s legislature’s failure to codify a trade deal reached with the United States last year.
Trump had previously threatened to impose new taxes on products from European countries as part of his quest to take control of Greenland. He then backed away.
Meanwhile, the yen’s gains remained in focus after comments from Japanese officials fueled speculation that the government could intervene in the market to prevent the currency from resuming its slide. For some, however, the recent recovery has partly neutralized the likelihood of intervention.
“The yen’s dramatic recovery suggests that real intervention is not necessary,” said Marc Chandler of Bannockburn Capital Markets.
Elsewhere, U.S. power grids are under increasing pressure following a winter storm that brought deep cold and heavy snow and ice from Texas to Maine. That knocked about 12% of U.S. natural gas production offline, and forecasts of frigid weather sent prices skyrocketing.
U.S. natural gas prices have jumped about 30%.
Treasuries remained range-bound on Monday, with the Federal Reserve expected to pause its rate cuts when it announces policy on Wednesday.
Fed officials are expected to keep rates unchanged after three straight cuts in late 2025, as a more stable jobs market restores some consensus within the central bank after months of growing division. Chairman Jerome Powell is likely to telegraph his view that policy is well positioned at the moment, but will refrain from giving much guidance on where rates will go.
Expectations for Fed policy have shifted in response to changes in the consensus over who Trump will nominate to succeed Powell, whose term expires in May.
“Even though the Fed is not expected to cut interest rates, Powell’s news conference could be as much about the Fed’s independence as its policy,” said Chris Larkin at Morgan Stanley’s E*Trade.
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(What’s moving Sensex And Clever Track latest market news, stock market advice, Budget 2025, Equity market on the 2025 budget And expert adviceon AND Markets. Additionally, ETMarkets.com is now on Telegram. For the fastest news alerts on financial markets, investment strategies and stock market alerts, subscribe to our Telegram feeds .)
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