Asian stock markets opened the week on an upbeat note, buoyed by renewed optimism following what negotiators from both the United States and China described as meaningful strides in trade talks over the weekend. The developments raised investor hopes that months of rising tariff tensions between the world’s two largest economies could soon see some relief.
The gains followed high-level discussions in Geneva—marking the first substantial face-to-face meeting between the two nations since President Donald Trump imposed steep tariffs in early April. That move had triggered retaliatory action from China and rattled global markets. The U.S. levied import duties as high as 145% on Chinese goods, prompting a swift countermeasure of 125% tariffs by Beijing.
The weekend talks involved key figures on both sides: U.S. Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer sat down with China’s Vice Premier He Lifeng and international trade envoy Li Chenggang. It was a closely watched meeting, and the tone coming out of it was unexpectedly constructive.
“We’ve made substantial progress between the United States and China in the very important trade talks,” Bessent said following the meetings. The White House echoed his sentiment, labeling the outcome a “new trade deal,” although no further details were released at the time.
Chinese representatives also expressed satisfaction with the talks. “The atmosphere in the talks was candid, in-depth and constructive,” Vice Premier He stated, calling the engagement “an important first step.” Greer added: “Differences were not as large as maybe thought.”
The sentiment was backed by the World Trade Organization, whose Director-General Ngozi Okonjo-Iweala met separately with He. She said the discussions marked “a significant step forward and, we hope, bode well for the future.”
Investor sentiment had already begun shifting ahead of the summit after Trump hinted at possible changes to his tariff strategy. In a social media post, he suggested, “An 80% Tariff on China seems right!”—a comment interpreted by some analysts as an indication that rates might soon be lowered.
Markets across Asia responded positively. Hong Kong’s Hang Seng Index jumped 1.3%, and Shanghai’s benchmark rose 0.6%. Elsewhere, gains were recorded in Sydney, Seoul, Taipei, and Wellington, while Tokyo’s Nikkei stayed roughly flat. U.S. futures also pointed to a stronger open, climbing more than 1%.
Currencies followed a similar trend. The dollar strengthened slightly against other major units, and oil prices edged higher amid expectations of stronger demand. Meanwhile, gold prices slipped further after a recent rally driven by safe-haven buying.
Commenting on the outcome, Pepperstone’s Chris Weston noted the reaction was in line with expectations: “The initial reaction to the weekend US-China talks is predictably encouraging. While this was always the likely outcome, it does represent an important step forward in the dialogue process and is obviously constructive.”
However, Weston also warned of the need for rapid follow-through. “We now look for the necessary substance and whether the two countries will take the tangible step towards the speculated US import tariff rates of 60 per cent.” He added, “Market players want the tariff rates taken down to 60 per cent swiftly and in one action.”
Karsten Junius of Bank J. Safra Sarasin struck a more cautious note. “We expect financial markets to remain volatile over the coming months, as they have almost fully priced out negative economic surprises and could once again be disrupted by more serious obstacles in trade negotiations,” he commented. “In all likelihood, things may still get worse before they get better.”
This week’s economic calendar is also in focus, with U.S. inflation and retail sales data due to be released—key indicators that could offer further insight into how the economy is coping in the wake of tariff turmoil.
Market Overview (as of 03:00 GMT):
Nikkei 225 (Tokyo): FLAT at 37,519.80
Hang Seng Index (Hong Kong): UP 1.3% at 23,171.53
Shanghai Composite: UP 0.6% at 3,363.13
Euro/USD: DOWN to $1.1227 from $1.1257
GBP/USD: DOWN to $1.3279 from $1.3308
USD/JPY: UP to 146.13 from 145.31
Euro/GBP: DOWN to 84.55 pence from 84.57 pence
WTI Crude: UP 0.1% to $61.06 per barrel
Brent Crude: UNCHANGED at $63.90 per barrel
Dow Jones (previous close): DOWN 0.3% at 41,249.38
FTSE 100 (previous close): UP 0.3% at 8,554.80
