A regional stock index swung between small gains and losses while equity-index futures for the US dipped 0.2%. Bonds were steady in early Asian trading and the dollar was little changed after hitting its lowest since 2023 in the last session. Technology shares helped lift the S&P 500 0.4% at the start of what’s historically one of its quietest months for gains.
Oil extended gains early Tuesday, while gold was steady after clocking its biggest daily gain in four weeks.
Investors are keeping a close eye on the latest twists in the trade war after a slew of headlines Monday. The US extended the exclusion of Section 301 tariffs on some Chinese goods until Aug. 31. President Donald Trump’s administration wants countries to provide their “best offer” on trade negotiations by Wednesday, Reuters reported. The US is pushing for a call between Trump and Xi Jinping after the two countries accused each other of violating a trade agreement reached last month.
“We continue to expect market volatility as investors digest fresh tariff headlines and incoming US economic data,” said Ulrike Hoffmann-Burchardi at UBS Global Wealth Management. “Fiscal worries remain, and geopolitical tensions are heating up.”
Trump has long said that direct talks with Xi were the only way to resolve differences between the nations, but the Chinese leader has been reluctant to get on the phone with his American counterpart — preferring that advisers negotiate key issues. The last known conversation between Trump and Xi took place in January before the US president’s inauguration.
Top Trump economic adviser Kevin Hassett signaled Sunday the White House was anticipating a call this week with the Chinese leader.
Meanwhile, Japan’s top trade negotiator Ryosei Akazawa is considering returning to the US for another round of trade negotiations this week as expectations mount for a deal as early as this month.
“The markets keep shrugging off simmering trade war risks,” Kyle Rodda, a senior market analyst at Capital.com. “While it has slipped down the list of priorities for market participants, below trade policy, fiscal policy and macroeconomic data, a very solid set of quarterly results from mega cap tech is enticing investors into the market.”
In Japan, attention will once again shift to a debt market sale Tuesday that may ramp up pressure on the government to adjust its borrowing plans and calm investor nerves.
Hot on the heels of auctions last month that exposed a lack of demand, the finance ministry will sell ¥2.6 trillion ($18 billion) of 10-year notes.
In geopolitics, Russia and Ukraine wrapped up a second round of talks in Istanbul that failed to bring the two sides closer to ending the war, but laid the groundwork for a new exchange of prisoners.
