A regional stock gauge gained 0.4% with advances in Australia, Japan and South Korea after the S&P 500 index climbed for a sixth straight day. Treasuries were steady at the open in Asia after whipsawing on Monday with the downgrading of US debt. The dollar edged higher along with US equity-index futures. Gold dipped 0.2% after gaining in the prior session.
Stocks in Europe and the US shrugged off the downgrade of US credit ratings after Treasury Secretary Scott Bessent downplayed concerns, saying the government is determined to lower spending and boost the economy. Investors in Asia are also staying focused on the outcome of US trade negotiations with India and Japan after talks with China on lowering tariffs boosted optimism.
“The search for fresh market catalysts begins,” said Chris Larkin at E*Trade from Morgan Stanley. “The S&P 500 ended last week up for the year, and just a little more than 3% below its all-time high. Whether it closes that gap in the near future is one thing, sustaining a rally past it is another.”
Meanwhile, China’s government accused the Trump administration of undermining recent trade talks in Geneva with its warning that using Huawei Technologies Co.’s artificial-intelligence chips “anywhere in the world” would violate US export controls. The Asian nation’s Commerce Ministry demanded in the statement that the US “correct its mistakes.”
India is discussing a US trade deal structured in three tranches and expects to reach an interim agreement before July, when President Donald Trump’s reciprocal tariffs are set to kick in, according to officials in New Delhi familiar with the matter.In Australia, investors will focus on comments from the central bank later Tuesday on the roadmap for the economy as the Reserve Bank of Australia meets to decide on interest rates. Economists and money markets expect the RBA to announce a quarter percentage-point cut to bring its cash rate a two-year low of 3.85%. Still, they reckon Governor Michele Bullock may be reluctant to suggest further easing to come when she appears before journalists later Tuesday.
In corporate news, Contemporary Amperex Technology Co. Ltd. will start trading in Hong Kong Tuesday after the Chinese battery giant wrapped up the world’s biggest listing this year, raising HK$35.7 billion ($4.6 billion) despite being blacklisted by the Pentagon and grinding through geopolitical storms.
Back in the US, several strategists said any pullback may be a buying opportunity.
Thomas Lee at Fundstrat Global Advisors sees the Moody’s downgrade as a “largely non-event,” while adding that in case of any stock weakness, he would be “buying this dip aggressively.” Goldman Sachs Group Inc. strategist David Kostin expects the “Magnificent Seven” group of technology stocks to resume outperforming the broader S&P 500 on robust earnings trends.
Separately, two Federal Reserve officials, including New York Fed chief John Williams, suggested policymakers may not be ready to lower interest rates before September as they confront a murky economic outlook.
Fed Vice Chair Philip Jefferson also emphasized a wait-and-see approach at the Atlanta Fed’s 2025 Financial Markets Conference Monday. He said it’s important for the Fed to make sure any potential increase in prices doesn’t evolve into a sustained rise in inflation.
Investors now see less than a 10% chance of a rate cut when policymakers next meet June 17-18 in Washington. Based on pricing in fed funds futures, investors expect two quarter-point reductions by year’s end, down from the four seen at the end of April.
In commodities, oil was steady after a two-day gain with upcoming talks between Russia and Ukraine, as well as the US and Iran in focus.
