Asian markets fell for a third consecutive day as enthusiasm from recent U.S. trade deals with the EU and Japan began to wane. The MSCI Asia-Pacific Index dropped 0.8%, led by losses in Hong Kong, while Japan's Topix also slipped. Investor focus has shifted toward a busy week of economic data and earnings, particularly the upcoming Fed meeting and reports from major tech firms. U.S. futures remained slightly positive, with the S&P 500 edging up 0.2% after Monday’s record close.
Despite recent trade agreements averting immediate economic fallout, investors have grown more skeptical about their long-term impact. European officials defended the EU–U.S. deal, but industry leaders—particularly in Germany—expressed concern over the competitiveness of the region’s auto sector. Meanwhile, U.S.–China officials resumed negotiations to extend their tariff truce, and the U.S. is seeking new deals with Cambodia and Thailand following a ceasefire along their border.
Attention now turns to the Fed’s two-day meeting, where rates are expected to remain unchanged amid political and economic crosswinds. In Japan, strong demand in a two-year bond auction signaled investor appetite as yields approach their highest levels since 2008. Commodity markets were mixed, with oil holding steady and gold edging higher, buoyed by expectations of future rate cuts.
In corporate news, Royal Philips raised its profit outlook after trade war impacts proved milder than anticipated, while EssilorLuxottica beat revenue expectations. In China, childcare-related stocks surged following new government subsidies aimed at boosting the birth rate. Bitcoin and Ether posted modest gains, while bond yields were mostly stable across major markets.
