US equities markets performed middling on Wednesday, February 26, as investors weighed US President Donald Trump’s new tariff threats. Trump announced 25% tariffs on EU imports and stated that fresh duties on Canada and Mexico would take effect in April rather than March 4. The Nasdaq Composite Index and the S&P 500 rose 0.26% and 0.01%, respectively, ahead of Nvidia’s (NVDA) highly anticipated earnings report. In comparison, the Dow dropped 0.43%. After hours, Nvidia exceeded earnings forecasts and provided a positive outlook for the upcoming quarter, increasing market enthusiasm. However, Trump’s recent tariff threat has generated fears about sweeping taxes on automobiles, computer chips, and medicines, which might impact risk assets.
The Hang Seng Index falls due to concerns over tariffs:
In Asia, the Hang Seng Index fell 0.95% on Thursday morning as investors responded to Trump’s tariff threats. Gains in the real estate sector were insufficient to overcome losses in technology sectors, driving the index down. The Hang Seng Technology Index fell 2.26% following Trump’s warning of broad tariffs on semiconductor chips. Alibaba (9988) and Baidu (9888) were down 1.46% and 2.31%, respectively. Meanwhile, the Hang Seng Mainland Properties Index rose 0.70%, continuing its gains from Wednesday—optimism about Beijing’s plans to recapitalize banks and increase lending fueled demand for real estate stocks.
The Nikkei Index remains stable in the face of yen weakness:
On Thursday morning, Japan’s Nikkei Index rose 0.15%, helped by a cheaper Yen and strong tech sector performance. The USD/JPY pair gained 0.14% to 149.292, rebounding from its prop below 149. A weaker Japanese yen may increase earnings forecasts for Japanese exporters, boosting demand for Japanese equities. Nvidia’s positive earnings boosted demand for Japanese technology stocks, with Tokyo Electron (8035) and Softbank Group (9984) up 0.81% and 0.43%, respectively. Meanwhile, Nissan Motor Corp. (7201) gained 4.81% in anticipation of a leadership shift.
ASX 200 Recovers With Mining and Gold Gains:
On Thursday morning, Australia’s ASX 200 Index rose 0.27%, reversing Wednesday’s losses. Gold and mining equities drove the rebound. Northern Star Resources Ltd (NST) rose 2.25% on overnight gold price advances. Despite a 0.98% dip in iron ore spot prices, Fortescue Ltd. (FMG) and Rio Tinto Ltd. (RIO) were up 1.42% and 1.03%, respectively. Dip buyers reappeared following Wednesday’s steep losses. However, Qantas (QAN) stole the show, rising 3.99% after posting good results and declaring its first dividend since the epidemic.
Prospects: Key Threats and Possibilities
- Trade developments, US inflation data, and central bank forward guidance will all impact the market mood.
- Development opportunities exist through innovation and strategic AI alliances. However, rising US-China tensions over AI may drive investors to safe-haven assets. Meanwhile, ongoing uncertainty about global trade policies may drive additional market volatility.
- Rising tensions may drive down Hong Kong and Mainland China equities while lowering tensions may prolong year-to-date gains.
- Stay ahead of market movements with professional insights and in-depth analysis—stay informed and make better investing decisions.
