HONG KONG – Asian stock markets lost momentum heading into the weekend, with investors taking a breather after a strong rally fueled by easing trade tensions between the United States and China. Despite a week of solid gains, concerns resurfaced over whether the temporary truce between the world’s two largest economies would translate into lasting relief, according to Channel News Asia.
The market rally, sparked by the suspension of new tariffs and hopes of renewed negotiations, is losing steam as traders shift their focus to lingering uncertainties. Analysts caution that while the 90-day pause in tariffs offers room for dialogue, the existing levies still pose a significant risk to global growth.
Chris Beauchamp, chief market analyst at IG, noted that even with more trade agreements in the pipeline, elevated U.S. import tariffs remain a heavy burden. “The true economic impact will unfold in upcoming earnings seasons. For now, investors are left wondering whether markets have already priced in enough bad news after the April slump,” he said.
U.S. economic data released Thursday also influenced market sentiment. Wholesale inflation rose less than expected, and retail sales were flat—adding to speculation that the Federal Reserve might be better positioned to cut interest rates later this year. The dollar edged lower in response.
Meanwhile, oil prices continued to slide after U.S. President Donald Trump indicated progress in nuclear negotiations with Iran. Any breakthrough could increase Iranian oil exports, easing supply concerns.
In corporate news, Walmart CEO Doug McMillon voiced fresh concerns about the fallout from tariffs. While welcoming the pause in U.S.-China tensions, he warned that higher import duties continue to pressure retail prices. “We’ll try to shield customers from cost increases, but we can’t absorb all of it,” McMillon said after the retailer posted a solid quarter.
Asian tech stocks dragged markets lower on Friday. In Hong Kong, Alibaba shares tumbled more than 6% after the company posted weaker-than-expected revenue growth, reflecting ongoing sluggishness in Chinese consumer spending. Fellow tech names JD.com, Tencent, and Meituan also dipped.
The broader regional picture was mixed. Japan’s Nikkei index was flat following data that showed the economy shrank for the first time in a year during the January–March quarter. Markets in Shanghai, Singapore, Mumbai, Wellington, and Manila ended in the red, while Sydney, Seoul, Jakarta, Bangkok, and Taipei closed higher.
European bourses opened with modest gains, with London, Paris, and Frankfurt all trading in positive territory.
As the week wraps up, investors are now looking to fresh signals from Washington to gauge whether the pause in trade hostilities can lead to more meaningful progress, or if the market’s recent rebound has already run its course (Channel News Asia).
