Asian equities edged higher as the extension of the U.S.–China tariff truce offered some relief to investors, easing near-term geopolitical risk. The MSCI Asia-Pacific Index rose 0.5%, led by tech stocks, while gains in Shanghai contrasted with losses in Hong Kong. U.S. futures inched up after the S&P 500 ended a six-day winning streak, and the dollar weakened ahead of the Fed’s rate decision.
Markets are taking the truce news in stride, reflecting a broader shift toward data and policy as the main drivers. U.S.–China talks concluded in Stockholm with signals of progress ahead of the August 12 deadline. Meanwhile, India could face new U.S. tariffs, and the rupee slid to a four-month low. South Korea’s won jumped on reports that FX issues may resurface in bilateral trade talks.
Investor focus is firmly on the Fed’s decision and Friday’s U.S. jobs report, with macro data likely to shape expectations for rate cuts later this year. The Fed is widely expected to hold steady, though signs of division within the committee are emerging. Commodities were steady, with oil holding recent gains and gold supported by rate-cut expectations.
In the banking sector, UBS beat profit forecasts, while HSBC missed and disclosed new regulatory probes. Markets overall remain in consolidation mode ahead of a dense run of economic and earnings catalysts.
