Asian markets fail to fully ride Wall Street rally as Donald Trump’s policy flip-flops persist

Asian markets traded mixed on Thursday as investor optimism from a Wall Street rally faded and caution returned over the volatility surrounding US economic policy announcements.
Japan’s Nikkei 225 gained 0.6 per cent to close at 35,075.72, while Australia’s S&P/ASX 200 rose 0.8 per cent to 7,983.00. However, South Korea’s Kospi slipped 0.3 per cent to 2,517.83, Hong Kong’s Hang Seng dropped 1.2 per cent to 21,805.29, and the Shanghai Composite eased 0.1 per cent.
Much of the market action followed Wall Street’s upbeat session overnight, where the S&P 500 climbed 1.7 per cent, supported by US President Donald Trump’s softer tone on both the Federal Reserve and China.
Trump told reporters late Tuesday that he had “no intention” of firing Fed Chair Jerome Powell, easing fears about threats to the central bank’s independence that had rattled investors.
Trump’s earlier criticism of the Fed for not slashing rates had caused jitters, but his reassurance calmed bond markets, pushing the 10-year Treasury yield down from 4.41 per cent to 4.38 per cent, according to AP.
Markets also responded to Trump’s hint that US tariffs on Chinese imports, currently at 145 per cent, could be reduced substantially. “It won’t be that high, not going to be that high,” he said, boosting hopes of a trade truce. Investors were further encouraged after Treasury Secretary Scott Bessent noted there’s potential for a “big deal” with China, although talks with Beijing are “not yet” underway, reported AFP.
Still, concerns remain over the durability of this relief. Hubert de Barochez of Capital Economics told AFP, “The rally was sparked largely by conciliatory remarks from US President Trump, whose rhetoric is notoriously volatile, raising questions about its durability.”
On Wall Street, the Dow Jones Industrial Average rose 419.59 points to 39,606.57, the Nasdaq jumped 2.5 per cent or 407.63 points to 16,708.05, and the S&P 500 surged 88.10 points to 5,375.86. Big Tech led the gains, Nvidia jumped 3.9 per cent despite earlier warnings about revenue losses due to chip restrictions, while Tesla surged 5.4 per cent following CEO Elon Musk’s commitment to focus more on running the EV company.
In currency markets, the dollar weakened to 142.82 yen from 143.15 yen, while the euro strengthened to $1.1335 from $1.1322, AP reported.
Brent crude was steady at $66.16 per barrel, and US crude edged up 3 cents to $62.30.