Optimism is fading over last week’s tentative trade truce between the United States and China.
Asian stocks were mixed Tuesday. Hong Kong’s Hang Seng (HSI) Index was flat. China’s Shanghai Composite Index dropped 0.5%. Both ended higher Monday.
South Korea’s Kospi also opened slightly lower, though edged higher during morning trading. On Monday, the index ended up 1.1%.
Japan’s Nikkei 225 (N225) was the region’s outlier: It advanced 1.7%, catching up to its global peers after being closed Monday for a holiday.
US futures, meanwhile, edged higher following a lower close on Wall Street overnight. Futures for the Dow (INDU), S&P 500 (SPX) and Nasdaq (COMP) all moved up 0.2% during Asian trading hours.
US President Donald Trump announced what he called a “very substantial phase one deal,” sparking hope for a resolution in the US-China trade war.
The preliminary agreement includes a halt on US tariff increases that were supposed to go into effect this week. Trump also told reporters that intellectual property, financial services and agricultural purchases are included in the agreement.
But the two sides still appear to be far from striking any sort of comprehensive deal, and the latest announcement doesn’t address some of the biggest rifts dividing the United States and China.
Separately, China’s consumer inflation reached its highest level in six years thanks to a surge in pork prices. The consumer price index rose 3% in September from the same period a year earlier, accelerating from a 2.8% increase in August, government statistics showed Tuesday. The reading was also higher than the 2.9% that analysts polled by Reuters expected.
Pork prices soared nearly 70% in September compared to a year ago. China has been grappling with a severe outbreak of African swine fever that has wiped out at least a third of its pig population.