Markets across Asia surged on Tuesday, buoyed by a strong rally in U.S. equities and renewed optimism surrounding the easing of trade tensions between the United States and China. A gauge of U.S.-listed Chinese stocks soared 5.4% on Monday, marking its best session in over two months, as investor sentiment improved on signs of a major de-escalation in the prolonged tariff conflict.
Japan’s Topix index extended gains for a 13th straight session, setting it on course for its longest winning streak in 16 years. Shares in Australia and Japan also opened significantly higher, tracking the S&P 500’s 3% surge from the previous U.S. session.
The sharp rebound in risk appetite followed a joint announcement by U.S. and Chinese trade negotiators, confirming a temporary tariff truce. The United States agreed to slash duties on Chinese goods from 145% to 30% for a 90-day period, while China reduced its tariffs on most U.S. imports to 10%. The coordinated move was widely interpreted as a meaningful step toward broader economic normalization between the world’s two largest economies.
Despite the euphoria in equities, the U.S. dollar remained relatively flat during Asian trading hours, following a jump on Monday.
The rally has come as a double-edged sword for some investors. Those who hedged against further market instability during April’s turmoil—through strategies like shorting the dollar, betting on increased stock volatility, or positioning for aggressive Fed rate cuts—now face painful unwinds. These reversals may also be contributing to the sudden momentum in global stock markets.
As attention turns to central bank policy signals and upcoming economic data, markets are likely to remain sensitive to any shifts in trade negotiations or monetary expectations. For now, however, the de-escalation has brought a welcome sense of relief to global investors.
