HONG KONG: Asian stocks fluctuated Wednesday (May 14), with investors struggling to track a strong day on Wall Street as euphoria over the China-US trade detente petered out.
But while the days of breathtaking volatility seen through April appear to be over for now, analysts warned that more work was needed for Washington to reach tariff deals with countries and instill a sense of stability.
Data showing US inflation unexpectedly slowed last month provided some cheer, though observers pointed out that the real impact of Donald Trump’s “Liberation Day” tolls will not likely be felt until May’s readings.
The US president on Tuesday played up a deal with Beijing.
“We have the confines of a very, very strong deal with China. But the most exciting part of the deal … that’s the opening up of China to US business,” he told Fox News.
His remarks were made aboard Air Force One as he headed off on his Gulf tour, with Saudi Arabia on Tuesday pledging US$600 billion worth of US investments in a range of sectors from defence to artificial intelligence.
The agreements – including a huge chip deal for Nvidia and Advanced Micro Devices – would boost US jobs, and the stock market is “gonna go a lot higher”, Trump said, citing an “explosion of investment and jobs”.
The tech-rich Nasdaq rallied with the S&P 500, which broke back into positive territory for the year, helped slightly by the inflation data.
But Asia struggled to extend the rally.
Hong Kong, Seoul, Jakarta and Taipei rose more than one percent but Wellington and Manila were flat, while Tokyo, Shanghai, Sydney and Singapore fell.
Oil, which had enjoyed a four-day rally on demand optimism and Trump’s warnings to Iran over a nuclear deal, also edged down.
Analysts said that while the China deal was welcome, investors were now bracing for the next developments in the US president’s trade standoff with the world as countries look to strike deals with the White House to avert stiff tariffs.
