US Futures Fall, Chinese Shares Drop Upon Reopen: Markets Wrap

(Bloomberg) — Contracts for US and European equities dropped, brushing off gains in Asian stocks as investors navigate the trade war and earnings from Wall Street’s big tech companies. 

Euro Stoxx 50 contracts fell 0.4%, while contracts on the S&P 500 declined 0.5%, after Google’s parent Alphabet Inc. and Advanced Micro Devices Inc. tumbled in extended trading. A gauge of Asian shares rose for a second straight day while equities fell in China, which reopened Wednesday after Lunar New Year holidays. The yen gained against the greenback and gold rose to a record high on haven demand.

Asian technology shares tracked their US peers higher just as investors turned cautious on China, which retaliated soon after the US imposed a 10% tariff on all imports from the Asian country. The first volleys in the latest US-China trade war made clear that Xi Jinping is taking a more cautious approach than during Donald Trump’s first term. 

10-year Treasuries and an index of dollar strength extended losses, after US job openings fell in December by more than forecast to a three-month low. 

The US jobs data “eased concerns about aggressive Fed rate hikes, which led to a weaker dollar, providing a tailwind for Asian markets,” said Manish Bhargava, chief executive officer at Straits Investment Management. “Investors may be adopting a ‘wait-and-see’ approach to the US-China trade war, shifting focus to broader economic indicators.”

Traders are turning to the US ISM services data for more clues on the Federal Reserve’s rate path. Activity in the services sector likely grew more slowly in January amid winter storms across much of the country and wildfires on the West Coast. High-frequency payroll data suggest hiring activity was relatively steady on a seasonally adjusted basis, according to Bloomberg Economics. 

Amid rising trade tensions, the US Postal Service said it was temporarily suspending inbound international packages from China and Hong Kong. While it’s not clear what prompted the move, it comes after Trump revoked a “de minimis” rule for China, which previously allowed small packages under $800 to enter the US duty-free.

“Trade relations between the US and China remain a risk, though if the 10% US tariff and China’s response measures were to be postponed, it will be good for the market,” said Kenny Wen, head of investment strategy at KGI Asia Ltd. “On the other hand, the disputes may escalate again.”

Trump told reporters there’s no rush to talk to Xi and he’ll speak to the Chinese president at the appropriate time.

“The delay in US-China trade negotiations may drive some near term volatility for China markets,” said Marvin Chen, an analyst at Bloomberg Intelligence. “But Trump has shown that negotiations are possible.”

While China’s tit-for-tat response to US was seen by some investors as a measured response to avoid a full-blown standoff, others are concerned that the weaker-than-expected manufacturing activity data and yuan’s depreciation could weigh on Chinese stocks.

Chinese software developer shares surged as sentiment was boosted by potential growth of AI applications after DeepSeek’s release of a lower-cost large language model. Taiwan Semiconductor Manufacturing Co. gained, helping push up the MSCI Asia Pacific Index.

Elsewhere, Japanese stocks reversed some losses, as shares of Toyota Motor Corp. gained after raising its annual operating profit outlook. Honda Motor Co. surged and Nissan Motor Co. slumped after the Nikkei reported that the two competitors failed to reach a consensus on a combination.

The yen appreciated on expectations that Bank of Japan will continue with rate hikes, following strong domestic wage data and government comments on inflation. 

In commodities, oil edged lower as concerns that the trade war would hurt global growth outweighed the announcement of reinforced sanctions on Iran.

Key events this week:

• Eurozone HCOB Services PMI, PPI, Wednesday
• US trade, Wednesday
• Fed’s Austan Goolsbee, Tom Barkin, Michelle Bowman, Philip Jefferson speak, Wednesday
• Eurozone retail sales, Thursday
• UK rate decision, Thursday
• US initial jobless claims, Thursday
• Fed’s Christopher Waller, Lorie Logan speak, Thursday
• Amazon earnings, Thursday
• US nonfarm payrolls, unemployment, University of Michigan consumer sentiment, Friday
• Fed’s Michelle Bowman, Adriana Kugler speak, Friday

Some of the main moves in markets:

Stocks

• S&P 500 futures fell 0.5% as of 6:25 a.m. London time
• S&P/ASX 200 futures were little changed
• Japan’s Topix rose 0.2%
• Hong Kong’s Hang Seng fell 1%
• The Shanghai Composite fell 0.6%
• Euro Stoxx 50 futures fell 0.4%
• Nasdaq 100 futures fell 0.6%
• Australia’s S&P/ASX 200 rose 0.5%

Currencies

• The Bloomberg Dollar Spot Index fell 0.1%
• The euro rose 0.1% to $1.0392
• The Japanese yen rose 0.7% to 153.30 per dollar
• The offshore yuan was little changed at 7.2835 per dollar
• The Australian dollar rose 0.1% to $0.6261
• The British pound was little changed at $1.2486

Cryptocurrencies

• Bitcoin rose 1.4% to $97,855.4
• Ether rose 4.3% to $2,754.46

Bonds

• The yield on 10-year Treasuries was little changed at 4.50%
• Australia’s 10-year yield declined six basis points to 4.36%

Commodities

• West Texas Intermediate crude was little changed
• Spot gold rose 0.7% to $2,861.20 an ounce

This story was produced with the assistance of Bloomberg Automation.

–With assistance from Toby Alder, Ruth Carson and John Cheng.

©2025 Bloomberg L.P.