Some Calm Returns to Asian Markets Even as Trade Tensions Escalate

A line chart showing the stock markets of 6 countries since Trump’s inauguration.

After three days of global market turmoil not seen since the early days of the Covid-19 pandemic, stocks in Asia regained a measure of calm on Tuesday despite little let up in the escalating trade tensions caused by President Trump’s tariffs.

Before markets opened in China, the government unleashed a series of measures to stabilize stocks. In turn, share prices in Hong Kong, a day after plunging 13.2 percent, rose 2 percent. Benchmarks in mainland China ticked higher, recovering from big declines the day before.

In Japan, the Nikkei 225, a key benchmark in Japan, gained 6 percent, recouping a portion of the previous days losses. The uptick in sentiment followed comments made on Monday by Treasury Secretary Scott Bessent, who said he would soon begin discussions with the Japanese government regarding tariffs.

The Kospi index rose in South Korea rose about 1.5 percent.

Markets around the world were unmoored last week by Mr. Trump’s announcement of broad new tariffs — a base tax of 10 percent on American imports, plus significantly higher rates on dozens of other countries. Countries have responded with tariffs of their own on U.S. goods, or with threats of retaliation. China retaliated forcefully on Friday, matching a new 34 percent tariff with one of its own on many American imports.

In the United States on Monday, the S&P 500 fell 0.2 percent after tumultuous trading that at one point pulled the benchmark into bear market territory, or a drop of 20 percent or more from its recent high. S&P futures, indicating how markets might perform when they reopen for trading on Wednesday in New York, were 1.5 percent higher.

Wall Street executives and analysts are growing increasingly worried that escalating trade tensions could do lasting damage to the global economy.