Asian shares mostly declined on Monday as the Trump administration ramped up pressure on trade partners to finalize new agreements ahead of Wednesday’s tariff deadline. The United States is expected to start sending formal letters to trading partners warning that higher tariffs could take effect on August 1.
Japan’s benchmark Nikkei 225 slipped 0.6% to close at 39,577.66, while Hong Kong’s Hang Seng index edged down 0.2% to 23,874.18. South Korea’s KOSPI index, however, rose 0.3% to 3,064.26.
In mainland China, the Shanghai Composite Index dipped 0.1% to 3,473.79. Australia’s S&P/ASX 200 also shed 0.2% to end at 8,588.70.
Oil prices retreated after OPEC+ agreed on Saturday to boost production by 548,000 barrels per day starting in August. The increase in output follows recent price volatility triggered by Israeli and U.S. attacks on Iran.
U.S. benchmark crude dropped 73 cents to $66.27 per barrel, while Brent crude, the global benchmark, declined by 78 cents to $68.02 per barrel.
Futures markets also reflected caution, with contracts for the S&P 500 down 0.4% and Dow Jones Industrial Average futures 0.3% lower.
“We expect markets to be volatile into the 9-July deadline when the 90-day pause on President Trump’s reciprocal tariffs expires for non-China trading partners,” Nomura Group said in a market commentary.
Asian shares mixed as Trump’s tariff deadline looms, while US stocks set records
The report noted that the short-term market outlook depends on factors such as which countries are included in Trump’s tariff letters, the rates of the proposed tariffs, and when they would take effect. Nomura added that if the tariffs are implemented at a later date, it could leave room for last-minute trade negotiations and maintain some market optimism for possible resolutions or extensions.
“With the July 9 tariff deadline fast approaching, all eyes are trained on Washington, scanning for signs of escalation or retreat. The path forward isn’t clear, but the terrain is littered with risk,” said Stephen Innes, managing partner at SPI Asset Management, in a commentary.
Despite concerns over trade tensions, U.S. stock markets posted strong gains last week. On Thursday, a better-than-expected jobs report pushed major indexes higher, with the S&P 500 rising 0.8% to set a new all-time high — its fourth record in five days. The Dow Jones Industrial Average gained 344 points, or 0.8%, while the Nasdaq Composite climbed 1%.
In currency trading on Monday, the U.S. dollar strengthened to 145.01 Japanese yen from 144.44 yen. The euro eased slightly to $1.1771 from $1.1779.