Shares mixed, dollar struggles on Trump's chaotic tariffs
Wall Street futures and FTSE futures were up sharply in the Asian session, following a holiday in the US and the UK at the start of the week, though shares elsewhere reversed their short-lived rally
Highlights:
- Wall Street set for strong open after Monday's holiday
- Investors' focus on Nvidia earnings, Fed speeches
- Dollar headed for fifth-straight monthly decline
Shares were mixed on Tuesday as US President Donald Trump's postponement of his threatened 50% duties on European Union shipments reinforced the unpredictability of his trade policies and kept investor sentiment fragile.
Wall Street futures and FTSE futures were up sharply in the Asian session, following a holiday in the US and the UK at the start of the week, though shares elsewhere reversed their short-lived rally.
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Nasdaq futures and S&P 500 futures each rose 0.9%, while FTSE futures tacked on 0.87%, pointing to a strong open during the cash sessions later in the day following Trump's U-turn on his threat to impose 50% tariffs on imports from the EU next month, restoring a July 9 deadline.
However, MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.55% and EUROSTOXX 50 futures eased 0.15%.
"While the delay in EU tariffs has provided a short-term boost to futures markets, underlying concerns about trade relations and upcoming economic indicators continue to weigh on investor sentiment," said Aaron Chwee, head of wealth advisory at OCBC.
A major focus for investors this week will be results from Nvidia on Wednesday, where the AI bellwether is expected to report a 65.9% jump in first-quarter revenue.
Speeches from a slew of Federal Reserve policymakers and Friday's US core PCE price index are also due, which could provide clues on the outlook for US rates.
In Asia, Japan's Nikkei was down 0.1%, while Hong Kong's Hang Seng Index eased 0.18%.
China's CSI300 blue-chip index fell 0.56%.
Yields on super-long Japanese government bonds fell early in the session, retreating from their all-time highs in the wake of last week's heavy selloff in the bonds.
Bond yields, particularly on the long end, have surged around the world as concerns mount over growing fiscal deficits in advanced economies, led by the US and Japan.
US Treasury yields were steady on Tuesday, with the two-year yield last at 3.9787% and the benchmark 10-year yield at 4.4773%.
LOSS OF CONFIDENCE
The dollar struggled to find its footing and was headed for a fifth straight month of declines against a basket of currencies , which would mark the longest such losing streak since 2017.
The euro hovered near a one-month high at $1.1379, while the yen was steady at 142.84 per dollar.
Trump's flip-flops on tariffs and concerns over the worsening US deficit outlook have undermined sentiment towards US assets and in turn been a drag on the dollar.
"A US dollar regime change could be in the making in the long term after it appears to have peaked recently," said David Meier, an economist at Julius Baer.
"Erratic US policymaking, the tense fiscal situation, and large external indebtedness, against the backdrop of the twin deficit, suggest that a weaker USD is the route of least resistance."
And as the dollar loses some of its safe-haven appeal, investors have instead sought alternatives such as gold, sending prices to record highs this year .
Gold last traded 0.3% lower at $3,331.79 an ounce.
Elsewhere, oil prices eased on Tuesday as investors weighed the possibility of an OPEC+ decision to further increase its crude oil output at a meeting later this week.
Brent crude futures declined 0.22% to $64.60 a barrel, while US West Texas Intermediate crude fell 0.33% to $61.33 per barrel.
