(Bloomberg) — Asian stocks and US equity-index futures rose while the dollar strengthened as China and the US made “substantial progress” on their trade talks, spurring a risk-on mode.
Shares in Australia, Japan and South Korea advanced at the open, with the Topix index gaining for a 12th day for its longest winning streak since October 2017. Futures contract for the S&P 500 and the Nasdaq 100 both climbed more than 1.2%, while oil rose and gold fell 1.5%. The greenback climbed against major peers while the yield on the 10-year US Treasury rose 3 basis points.
While stocks have rallied recently – the S&P 500 Index has almost risen back to where it was prior to President Donald Trump’s announcement of reciprocal tariffs in early April – further gains will depend on the de-escalation of the trade war between the US and China. The fear is that unless reversed, tit-for-tat tariffs risk dealing a stagflationary blow to global economies by driving them into recession while boosting inflation at the same time.
“Although investors are still waiting for details of the US-China agreement, the overall positive tone of the talks should boost their sentiment toward China and Asia-Pacific equity markets,” said Homin Lee, senior macro strategist at Lombard Odier Singapore Ltd.
Speaking after two days of negotiations in Geneva, US Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer said that they will share more information on Monday. Greer told reporters “differences were not as large as maybe thought.” Chinese officials echoed the message during a separate briefing on Sunday, saying that talks between the two sides achieved a “sound sustainable development’ for the Chinese-US relationship.
Trump had paused the steepest of the tariffs on most countries other than China, sparking a rally in the S&P 500. A trade deal struck with the UK last week also helped lift confidence that pacts were possible although the details disappointed.
“The de-escalation of trade, economic and geopolitical tensions could give market risk sentiment a boost,” said Valentin Marinov, head of G-10 FX research and strategy at Credit Agricole. “The latest developments could become a boon for risk-correlated assets and currencies and a blow to safe-haven currencies like the yen, Swiss franc and even the euro.”
Risk assets may also benefit from the ceasefire between India and Pakistan, as well as signs the leaders of Russia and Ukraine may meet this week.
Rounds of retaliation have raised US tariffs on imports from China to 145%, while the Chinese have put in place a 125% duty on US goods. Two-way annual trade between both countries is around $700 billion, and China has an estimated $1.4 trillion of portfolio investments in the US.
The US side had set a target of reducing tariffs below 60% as a first step that they feel China may be prepared to match, people familiar with the conversations said before the weekend. Trump said on social media on Friday that an 80% levy “seems right!”
Trade pressures have already hit US businesses, with companies from United Parcel Service Inc. to Ford Motor Co. to Mattel Inc. withdrawing earnings guidance. The average member of the S&P 500 made 6.1% of its revenue from selling goods in China or to Chinese companies in 2024, according to an analysis from Bloomberg Intelligence.
Some of the main moves in markets:
Stocks
- S&P 500 futures rose 1.3% as of 9:09 a.m. Tokyo time
- Japan’s Topix rose 0.2%
- Australia’s S&P/ASX 200 rose 0.3%
- Euro Stoxx 50 futures rose 0.5%
Currencies
- The Bloomberg Dollar Spot Index was little changed
- The euro fell 0.1% to $1.1237
- The Japanese yen fell 0.3% to 145.80 per dollar
- The offshore yuan rose 0.2% to 7.2266 per dollar
Cryptocurrencies
- Bitcoin was little changed at $104,249.67
- Ether rose 0.2% to $2,515.85
Bonds
- The yield on 10-year Treasuries advanced three basis points to 4.41%
- Australia’s 10-year yield advanced four basis points to 4.33%
Commodities
- West Texas Intermediate crude rose 0.4% to $61.28 a barrel
- Spot gold fell 1.2% to $3,285.69 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Naomi Tajitsu, Anya Andrianova, Matthew Burgess and Winnie Hsu.
(An earlier version of the story was corrected for inaccurate spelling of Switzerland in seventh paragraph.)
©2025 Bloomberg L.P.
