Stocks Edge Higher as AI Hopes Offset Tariff Fears: Markets Wrap

(Bloomberg) — Asian stocks posted small gains as optimism over more artificial intelligence spending under Donald Trump offset fears over the impact of tariffs on China.

Shares in Taiwan and Japan led gains, lifted by technology stocks after Trump announced a new investment push for artificial intelligence. But Chinese shares bucked the trend: The benchmark CSI 300 Index was as much as 1.3% lower, while the Hang Seng China Enterprise Index fell as much as 2.1%. The broad MSCI Asia Pacific Index was up around 0.2%.

The divergent fortunes of Asian stock markets underscore the difficult questions investors will be forced to weigh up over the coming months, when the Trump administration is expected to make a series of sweeping policy changes. The decline in Chinese shares came after Trump said he was still considering a 10% tariff on all Chinese goods. 

“China will still need to brace for potential tariffs and that’s going to slow down exports this year,” Frederic Neumann, chief Asia economist at HSBC in Hong Kong, said on Bloomberg TV. It comes at a difficult time for the economy and “there’s not much really that China can do apart from trying to negotiate,” he added. 

Still, the scale of the decline in Chinese shares surprised some market participants. The country was spared the brunt of Trump’s early policy flurry, with his first big tariff comments instead targeting Canada and Mexico.

“We are seeing quite a broad-based pull back today which is a surprise to me,” said Nigel Peh, a portfolio manager at Timefolio Asset Management Co. “I feel the 10% tariffs against China — a more gradual approach — are actually better than feared. There’s a chance that people are just using any excuse to take profit.”

US 10-year Treasury yields advanced one basis point after falling five basis points in the previous session. The dollar strengthened against every Group-of-10 peer.  

Chinese Vice Premier Ding Xuexiang told the annual World Economic Forum in Davos, Switzerland, that his nation will expand its imports “to promote balanced trade.” 

Elsewhere in Asia, the Bank of Japan is moving toward deciding to raise interest rates at its policy meeting this week, Kyodo News reported. That supports recent speculation that the bank will hike by 25 basis points. The yen was down slightly against the greenback, part of a broad move higher by the dollar.

SoftBank Group’s shares rose more than 9% after Trump named the company as a participant in the ‘Stargate’ AI joint venture. The move pushed the Japanese company’s shares to their highest level since July.

Other Asian technology companies also got a boost from the AI spending news. Shares of Taiwan Semiconductor Manufacturing Corp and South Korea’s SK Hynix Inc. rose more than 2.5%. Fujikura Ltd., a Japanese wire cabling company that has been one of the country’s top performers, added to its recent gains with a more than 12% rise.

Data from New Zealand on Wednesday showed annual inflation was unexpectedly steady in the final three months of last year, remaining above the midpoint of the central bank’s target band.

In commodities, oil declined as Trump threatened a tariff on China. Gold held near the highest since early November, with traders monitoring the outlook for the global economy. 

Key events this week:

• US Conference Board leading index, Wednesday
• Samsung Galaxy “Unpacked 2025” event, expected to reveal new flagship phone models, Wednesday
• Eurozone consumer confidence, Thursday
• US jobless claims, Thursday
• Bank of Japan policy meeting, Friday
• Eurozone HCOB Manufacturing & Services PMI, Friday
• US University of Michigan consumer sentiment, existing home sales, S&P Global Manufacturing & Services PMI, Friday

Some of the main moves in markets:

Stocks

• S&P 500 futures rose 0.3% as of 12:11 p.m. Tokyo time
• Nikkei 225 futures (OSE) rose 1.5%
• Japan’s Topix rose 0.9%
• Australia’s S&P/ASX 200 rose 0.3%
• Hong Kong’s Hang Seng fell 1.3%
• The Shanghai Composite fell 0.8%
• Euro Stoxx 50 futures rose 0.2%

Currencies

• The Bloomberg Dollar Spot Index was little changed
• The euro fell 0.2% to $1.0412
• The Japanese yen fell 0.1% to 155.75 per dollar
• The offshore yuan fell 0.2% to 7.2827 per dollar
• The British pound fell 0.1% to $1.2334
• The Australian dollar fell 0.1% to $0.6266

Cryptocurrencies

• Bitcoin fell 1% to $105,735.36
• Ether rose 0.3% to $3,340.88

Bonds

• The yield on 10-year Treasuries advanced one basis point to 4.59%
• Japan’s 10-year yield advanced one basis point to 1.195%
• Australia’s 10-year yield advanced five basis points to 4.46%

Commodities

• West Texas Intermediate crude was little changed
• Spot gold rose 0.2% to $2,749.30 an ounce

This story was produced with the assistance of Bloomberg Automation.

–With assistance from Paul Allen and Shery Ahn.

©2025 Bloomberg L.P.