Tokyo — Asian stock markets were mostly lower on Tuesday amid growing concerns over U.S. President-elect Donald Trump’s comments that he plans to impose sweeping new tariffs on Mexico, Canada and China as soon as he takes office.
Japan’s Nikkei 225 index fell 0.9% to 38,442.00. S in Australia&The P/ASX 200 was down 0.7% at 8,359.40. Korea’s KOSPI fell 0.6% to 2,520.36. Hong Kong’s Hang Seng index rose slightly, less than 0.1%, to 19,158.76, while the Shanghai Composite Index rose 0.1% to 3,261.12.
Stocks rose on Wall Street on Monday, with companies likely to benefit the most from lower interest rates and a stronger economy. S&The P 500 rose 0.3% to 5,987.37, closer to its peak reached two weeks ago. The Dow Jones Industrial Average closed at 44,736.57, adding 1% to its previous record on Friday, while the Nasdaq Composite rose 0.3% to 19,054.84.
Treasury yields eased in what some analysts are calling a “Bessent bounce” after President Trump said he wanted to nominate hedge fund manager Scott Bessent as Treasury secretary.
Bessent has argued that the U.S. government has a deficit, meaning it spends more than it brings in through taxes and other revenues. This approach could allay concerns on Wall Street that Trump’s policies could lead to much larger deficits, which in turn could put upward pressure on Treasury yields and push prices down.
The yield on 10-year Treasury bonds, which topped 4.44% immediately after Trump’s election, fell from 4.41% late Friday to 4.26% on Monday. This is a notable move, as lower yields make it cheaper for all kinds of businesses and households to borrow money. It also increases the prices of stocks and other investments.
The small-cap Russell 2000 index rose 1.5%. It ended just below the all-time high set three years ago. Smaller companies may feel a bigger boost due to lower borrowing costs because they need to borrow more to grow.
Yields on two-year Treasury notes, which more closely track market expectations of what the Federal Reserve will do with overnight rates, also fell sharply.
The Federal Reserve began cutting key interest rates from 20-year highs just a few months ago, hoping to keep the job market buoyant after bringing inflation nearly down to its 2% target. But soon after Trump’s victory, traders scaled back bets on how much the Federal Reserve would cut interest rates next year. They feared that President Trump’s preferred tax rate cuts and increased border spending would increase the national debt.
The report due Wednesday could influence how much the Federal Reserve will cut interest rates. Economists expect it to show that the Fed’s preferred underlying inflation trend accelerated to 2.8% last month from 2.7% in September. As inflation rises, the Fed will become more reluctant to cut interest rates.
Bath on the stock market & Body Works rose 16.5% after posting stronger profits in its latest quarter than analysts expected. The personal care and home fragrance seller also raised its full-year financial outlook.
Much attention has been focused on how resilient U.S. shoppers can remain, given high inflation and still high interest rates across the economy.
Macy’s, another large retailer, said Monday that its latest quarterly sales were in line with expectations, but that it would delay releasing its full financial results. More time is needed to complete the investigation after an employee was found to have intentionally concealed up to $154 million in shipping costs. Macy’s shares fell 2.2%.
In other trading early Tuesday, U.S. benchmark crude added 25 cents to $69.19 a barrel. Brent crude oil, the international standard, rose 25 cents to $73.26 per barrel.
In currency trading, the US dollar fell from 154.20 Japanese yen to 153.87 yen. The price of the euro was reduced from $1.0495 to $1.0478.
