Shares in Japan, Australia and South Korea all gained, while futures pointed to a weaker open for Hong Kong. US stocks had a wild ride Wednesday — after a rally that drove the S&P 500 up as much as 1.2%, the gauge turned lower and then eventually ended trading 0.4% up. A gauge of dollar strength slipped for a third day, while Treasuries stalled after two-year yields approached their lowest level this year.
President Donald Trump said the US was now locked in a trade war with China, while Treasury Secretary Scott Bessent proposed a longer pause on high tariffs to ease a dispute over critical minerals. The remarks added to market whiplash as tensions between Washington and Beijing flared again, with stocks fluctuating after Friday’s selloff and pulling in dip buyers.
“Investors who are buying the dip are still driving the action, keeping sentiment firm even as technical indicators show signs of strain,” said Mark Hackett, a strategist at Nationwide.
Elsewhere, oil rose from a five-month low after Trump said Indian Prime Minister Narendra Modi had vowed to halt purchases of Russian barrels, a move that could squeeze global supply. Gold topped $4,200 an ounce for the first time.
Treasury yields edged higher on Wednesday. The yield on two-year notes closed at 3.50% after earlier trading within about three basis points of the low reached during April’s tariff-fueled market chaos. Following one of the best six-month stretches for equities since the 1950s, the market has seen brief bouts of profit-taking in a move dubbed a “healthy reset” after a torrid surge. Those downward shifts haven’t lasted long on speculation that Federal Reserve interest-rate cuts will keep the positive momentum going for American companies.
As the earnings season got under way, Morgan Stanley and Bank of America Corp. jumped on solid results. Meantime, positive comments on artificial intelligence from ASML Holding NV boosted chipmakers. In late hours, United Airlines Holdings Inc. reported better-than-expected earnings.
On trade, Trump spoke just hours after Bessent dangled the possibility of extending a pause of import duties on Chinese goods for longer than three months if China halts its plan for strict new export controls on rare-earth elements. The US and China have agreed to a series of 90-day truces since earlier this year, with the next deadline looming in November.
In Japan, political tensions are ramping up as ruling party leader Sanae Takaichi called on the leaders of an Osaka-based opposition party to back her in a parliamentary vote to decide the prime minister expected next week.
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