Asian markets mostly posted gains on Monday, tracking Wall Street’s record-setting rally as optimism grew over progress in US-led trade negotiations ahead of a pivotal July 9 deadline.
The bullish sentiment was driven by hopes that ongoing talks between the United States and global trading partners — including Japan and India — could avert sweeping tariffs planned by the US administration. Adding fuel to the rally was growing speculation that the US Federal Reserve may introduce additional interest rate cuts in the coming months.
Wall Street closed Friday with the S&P 500 and Nasdaq reaching all-time highs, bolstered by investor confidence that trade tensions could ease. According to US Treasury Secretary Scott Bessent, multiple countries have submitted favorable trade proposals, and while not all deals may be finalized by next week’s deadline, progress is being made.
“If we can secure 10 or 12 of the key agreements from our list of 18, we believe the rest can follow by Labor Day,” Bessent stated.
Despite President Donald Trump’s insistence that he is not inclined to extend the July 9 deadline, he acknowledged the possibility during a taped interview:
“I don’t think I’ll need to, but I could. No big deal.”
Meanwhile, Canada’s Finance Minister Francois-Philippe Champagne confirmed that Ottawa would roll back digital services taxes targeting US tech firms in a renewed bid to reach a bilateral trade deal with Washington. Talks are now scheduled to resume with a target conclusion by July 21.
Market Reaction Across Asia
Following Wall Street’s historic session, several Asian bourses rallied:
Tokyo’s Nikkei 225 jumped 1.6% to 40,809.82, extending its tech-fueled surge.
Shanghai Composite added 0.3% to 3,433.80.
Gains were also recorded in Sydney, Seoul, Singapore, Manila, and Jakarta.
However, Hong Kong, Wellington, and Taipei edged lower as investors booked profits and awaited further clarity on the US-China trade situation.
While recent data showed a slowdown in the contraction of Chinese manufacturing activity, markets showed muted reaction as trade-related uncertainty still looms large.
Dollar Dips, Rate Cut Bets Rise
The US dollar weakened against major currencies amid increasing market expectations for multiple Fed rate cuts. Traders are now pricing in not only two cuts by the end of 2025 but also a prolonged easing cycle into 2026.
“Markets are betting that the next Fed chair walks, talks, and cuts like a dove in MAGA red,” remarked Stephen Innes of SPI Asset Management.
There’s also heightened speculation over the future of Fed Chair Jerome Powell, as Trump hinted at possibly appointing a new successor within months.
Trump’s ‘One Big Beautiful Bill’
On Capitol Hill, debate continues over Trump’s massive tax proposal — dubbed the “One Big Beautiful Bill” — aimed at extending first-term tax cuts and boosting border security. The package, estimated to cost $4.5 trillion, faces scrutiny over its potential long-term impact on the national debt. The Congressional Budget Office estimates it could add $3.3 trillion to the deficit over 10 years.
Despite pushback, Trump has doubled down on his demand that the bill be passed by July 4, applying pressure on hesitant Republican lawmakers.
Key Market Figures (as of 02:30 GMT)
Tokyo – Nikkei 225: ▲ 1.6% at 40,809.82
Hong Kong – Hang Seng: ▼ 0.4% at 24,183.73
Shanghai – Composite: ▲ 0.3% at 3,433.80
Euro/US Dollar: ▲ $1.1724 from $1.1718
British Pound/US Dollar: ▲ $1.3723 from $1.3715
US Dollar/Yen: ▼ 144.31 from 144.68
West Texas Intermediate: ▼ 0.5% at $65.18/barrel
Brent Crude: ▼ 0.3% at $67.57/barrel
New York – Dow Jones: ▲ 1.0% at 43,819.27 (previous close)
London – FTSE 100: ▲ 0.7% at 8,798.91 (previous close)
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