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Global Markets Overview
Asian shares dipped slightly on Tuesday, hampered by thin trading in observance of U.S. and U.K. holidays, despite strength in U.S. futures. European equities climbed Euro STOXX 50 rose about 1.3% following the tariff delay, as investors also positioned ahead of Nvidia’s earnings and Fed speaker appearances.
On the macro front, the dollar weakened amid lingering U.S. fiscal concerns, Bitcoin edged higher on renewed crypto optimism, and markets are eyeing key data releases such as U.S. core PCE due Friday alongside Japan’s record external assets report.
Equities
Asia-Pacific
Asian markets were mixed. Japan’s Nikkei 225 fell 0.2%, pressured by hawkish comments from BOJ Governor Ueda amid 3.5% core inflation and 3.1% corporate service inflation in April. South Korea’s Kospi dropped 0.46%, while India’s GIFT Nifty traded flat at 25,026. China’s benchmarks eked out modest gains, buoyed by a 14% rise in industrial profits from January to April, even as trade uncertainty persists.
Europe
European stocks are set to open higher as the EU accelerates trade talks with the U.S. to avert tariffs. The euro hit a one-month high against the dollar after Trump’s tariff delay, and ECB President Lagarde suggested it could challenge dollar dominance. However, growth forecasts for 2025 were cut to 0.9% due to trade risks.
United States
With U.S. markets closed on Memorial Day, attention shifted to futures, which jumped on news of the tariff postponement. Dow Futures rose 0.86% and Nasdaq Futures gained 1%. U.S. long-term Treasury yields jumped above 5% last week amid fiscal concerns but steadied slightly on Tuesday.
Currencies
The U.S. dollar fell 0.3% to ¥142.35 as investors weighed the proposed $3.8 trillion tax and spending bill. The Dollar Index declined 0.1%, while the euro strengthened to $1.1399, near a one-month high in hopes it could emerge as a reserve alternative if the EU bolsters economic and security frameworks. USD/INR stood at 85.00.
Commodities
Oil prices slipped on speculation that OPEC+ may boost output at its May 31 meeting—Brent dipped to $64.62/barrel and WTI fell to $61.38. Iran raised its official June crude price for Asia to $1.80 above the Oman/Dubai benchmark (up from $1.65 in May). Gold hovered near a two-week high at $3,339.99/ounce, supported by a softer dollar and U.S. fiscal stability concerns; futures traded around $3,339.80.
Cryptocurrencies
Bitcoin rose 1.5%—its largest move in four days—after reports that Trump Media plans a $3 billion crypto investment fueled broader optimism in digital assets.
Regional Highlights
Japan: Japan’s net external assets reached a record ¥533.1 trillion ($3.73 trillion) in 2024—its seventh consecutive annual increase—driven by a weak yen and overseas acquisitions. However, Germany overtook Japan as the world’s top creditor with ¥569.7 trillion. Corporate service inflation climbed to 3.1% in April, while core CPI hit 3.5%, bolstering expectations for BOJ rate hikes. Governor Ueda emphasized the need to monitor inflation risks, particularly from food prices, which could shape future policy decisions.
China: Chinese industrial profits surged 14% year-to-date through April, supported by targeted policy measures. Despite this boost, equity markets remained cautious ahead of U.S. trade negotiations, as investors weigh complex tariff scenarios and the possibility of further tariff increases if no deal is reached.
U.S.: The delay of 50% EU tariffs has lifted risk sentiment, but tech names came under pressure after President Trump threatened a 25% tariff on iPhones not made in the U.S., sending Apple shares down 3% pre-market. Retail earnings were mixed. Target underperformed, while Home Depot held steady. All eyes are on Nvidia and Salesforce, whose Q1 reports due May 28 will be pivotal for market direction.
Looking Ahead
Investors will turn to Friday’s U.S. core PCE price index for fresh clues on Fed policy, and to Nvidia’s Q1 earnings on Wednesday—consensus forecasts call for a 65.9% year-on-year revenue increase.
A Quick Market Overview
Equities
Japan’s Nikkei 225 closed 1% higher—the largest one-day gain in nearly two weeks—while the Topix rose 0.6%. In China, the CSI 300 index fell 0.39% to 3,845.04.
The Euro Stoxx 50 jumped 1.30% to 5,395.33, reversing recent losses after the U.S. tariff delay; auto and luxury-goods sectors led the advance.
U.S. futures rallied, with S&P 500 futures up 1.11% and Nasdaq futures rising 1.26%, as traders positioned for heavyweight earnings reports and key Fed speeches.
Currencies
The dollar slid 0.3% to ¥142.35, and the DXY index declined 0.1%, while the euro strengthened to $1.1399 and sterling to $1.3581 amid fiscal and trade-policy concerns.
Commodities
WTI crude edged down 0.37% to $61.26 per barrel as markets weighed potential OPEC+ output decisions.
Spot gold held near a two-week high at $3,339.99 per ounce, supported by a softer dollar and U.S. fiscal worries; gold futures traded at $3,339.80.
Crypto
Bitcoin traded around $109,785, buoyed by bullish technical patterns and a recent surge to record highs above $109,760.
Today’s Market Takeaways
Markets are buoyed by temporary trade reprieves—most notably the U.S.–EU tariff delay—yet volatility risks remain elevated. President Trump’s continued threats of 25% levies on iPhones and up to 145% tariffs on Chinese goods keep uncertainty high. In Japan, persistent inflation and hawkish signals from the BOJ may strengthen the yen but could weigh on equity performance. China’s fiscal and monetary stimulus underpins growth, although trade tensions continue to cap upside potential. Investors should monitor today’s U.S. consumer confidence release, OPEC+ output decisions, and the upcoming tech earnings cycle for directional cues. While near-term optimism prevails, the interplay of tariffs, inflationary pressures, and expanding fiscal deficits argues for a cautious stance.
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