Asia stocks mixed on renewed China-US trade talk hopes; investors eye Fed meeting

Asia stock markets trading mixed on Tuesday, on hopes for US-China trade talks and investor caution ahead of the Federal Reserve’s policy decision. Trump on Sunday opened a new front in his trade war, saying movies produced outside the U.S. would face a 100% tariff. On Monday, he said he plans to unveil pharmaceutical tariffs over the next two weeks. Gold rose above $3,350 per ounce on Tuesday, reaching its highest level in more than a week, as President Donald Trump’s new tariff threat spurred demand for safe-haven assets. Japan ( NKY:IND ) market closed. The Japanese yen weakened toward 144 per dollar on Tuesday, snapping a two-day winning streak as the US dollar regained momentum on hopes for US-China trade talks and investor caution ahead of the Federal Reserve’s policy meeting. Investors are also monitoring the outcome of recent US-Japan bilateral trade negotiations, with Tokyo aiming to finalize an agreement by June. Trading volumes are expected to be light on Tuesday due to a public holiday in Japan. China ( SHCOMP ) rose 1.05% toward 3,300 while the Shenzhen Component gained 1.3% to 10,030 on Tuesday, erasing losses from last week as Chinese markets reopened after the Labor Day holidays, the offshore yuan weakened to around 7.23 per dollar after touching a six-month high in the previous session, as investor sentiment was dampened by disappointing PMI data. Meanwhile, a private survey reported China’s services sector grew the least in seven months in April, as new orders slowed sharply and sentiment neared a record low. Reflecting similar weakness, the Composite PMI dropped to a three-month low of 51.1, though it still marked the 18th consecutive month of private sector growth. Uncertainty surrounding China-US tariff talks grew as traders sought clarity, and market pressure mounted following Trump’s proposed 100% movie tariff and pharmaceutical tariff plans. Hong Kong ( HSI ) rose 1.05% to 22,645 in early trading on Tuesday, marking a fourth straight session of gains as markets reopened after a holiday. Sentiment was further boosted by flash data showing the city’s economy grew 3.1% yoy in Q1 of 2025, the strongest pace in five quarters. India ( SENSEX ) fell 0.23% to 80,557 in the morning session on Tuesday, pulling back from gains in the previous two sessions as most sectors retreated, notably pharmaceuticals. Domestically, final data revealed that India’s private sector growth was revised lower, though it remained the fastest in eight months, supported by robust performances in both manufacturing and services. Australia ( AS51 ) fell 0.03% hovered near 8,158 on Tuesday, holding steady after a 1% loss in the previous session, as investors remained cautious amid ongoing global trade uncertainties. The Australian dollar edged lower to around $0.645 on Tuesday, pulling back from recent five-month highs. Private house approvals in Australia fell by 4.5% month-over-month to a 13-month low of 8,804 units in March 2025, reversing a marginally revised 1.1% increase in February, according to preliminary data. The seasonally adjusted number of total dwellings approved in Australia fell by 8.8% month-over-month to a six-month low of 15,220 units in March 2025. In the U.S., on Monday, all three major indexes ended lower , as investors weighed strong economic data against trade tensions and the upcoming Fed meeting. U.S. stock futures dipped slightly on Tuesday as investors braced for the Federal Reserve’s upcoming monetary policy meeting: Dow -0.16% ; S&P 500 -0.28% ; Nasdaq -0.51% . Traders also remained cautious ahead of the U.S. Federal Reserve’s monetary policy decision on Wednesday. Currencies: ( JPY:USD ), ( CNY:USD ), ( AUD:USD ), ( INR:USD ), ( HKD:USD ), ( NZD:USD ). More on Asia: China service growth hits 7-month low as trade disruptions weighs on new business orders Australia private sector expands at 51 in April, services sector expands for 15th straight month Australia inflation gauge eases slightly in April by 0.6% Australia Q1 producer price inflation beats estimates; retail sales rises 0.3% in March BOJ keeps rates unchanged, revises down its growth outlook

Source: Seeking Alpha