Hang Seng Index and Nikkei 225: Stocks Rise on Trade Talks, Yield Relief

Wall Street Mixed After Midweek Rout

Wall Street steadies as rate jitters fade and traders eye China talks. US markets posted mixed performances on Wednesday, May 22, as easing Treasury yields provided market relief. The Nasdaq Composite Index advanced 0.28%, while the Dow closed the session flat, and the S&P 500 edged 0.04% lower.

10-year US Treasury yields rose to 4.627%—a high since February 12—before easing to 4.529% by the close. Despite the pullback, yields remained elevated, weighing on risk sentiment. Uncertainty about the potential impact of tariffs on US inflation and the timing of Fed rate cuts remained headwinds.

However, better-than-expected Services sector PMI data eased US recession fears. The S&P Global Services PMI rose to 52.3 in May, up from 50.8 in April.

US-China Trade Developments Lift Sentiment

Improving US-China trade relations bolstered risk sentiment on Friday, May 23. CN Wire reported on the latest developments, stating:

“Chinese Vice Foreign Minister Ma Zhaoxu held call with US Deputy Secretary Kurt Campbell on May 22. China, US agree to maintain ongoing communication.”

CN Wire also reported news of China’s Vice Premier He Lifeng meeting with JPMorgan Chase CEO Jamie Dimon, expressing support for deeper US business ties.

The news raised hopes of the US and China reaching a trade agreement during the current 90-day trade pause window.

Hang Seng Index Advances on Trade Optimism

Asian equities opened higher on May 23, with US-China trade headlines fueling gains. The Hang Seng Index advanced 0.34% in early trade. Real estate and tech stocks contributed to the morning gains.

The Hang Seng Mainland Properties Index rose 0.41%, while the Hang Seng Tech Index gained 0.52%. BYD Corp. (01211) jumped 1.75%, leading EV stocks.

Mainland China’s equity markets posted modest gains. The CSI 300 rose 0.07%, while the Shanghai Composite edged 0.01% higher. Investors were cautious as a US-China trade deal remained elusive.

Nikkei 225 Rallies Despite Inflation Concerns

Japan’s Nikkei 225 rallied 0.99% on Friday morning amid fading concerns about US debt levels. Reports of Japan’s tariff negotiator Akazawa planning to return to the US for round four of talks raised hopes for a trade deal, boosting risk sentiment.

However, hotter-than-expected inflation numbers from Japan and a stronger Yen limited the morning gains. Japan’s core inflation (ex-food and energy) rose from 2.9% in March to 3.0% in April, fueling speculation about a third-quarter BoJ rate hike. The stronger Yen pushed USD/JPY down 0.20% to 143.712. A stronger Yen may weaken demand for Japanese goods and export-driven corporate earnings.

Sony Corp. (6758) gained 1.72%, while Tokyo Electron (8035) and Softbank Group (9984) climbed 1.41% and 0.71%, respectively.

ASX 200 Advances as US Yields Drop

Australia’s ASX 200 gained 0.34% in the morning session as falling US Treasury yields drove demand for risk assets. The pullback in 10-year US Treasury yields fueled appetite for high-yielding Aussie bank stocks. ANZ and National Australia Bank rallied 1.21% and 1.34%, respectively.

Outlook: Trade Talks, Stimulus, and Geopolitical Risks

Markets remain on edge as fiscal concerns and trade uncertainties persist. US-China negotiations will likely steer sentiment in the short term, with easing tensions potentially supporting risk assets.

Investors will also monitor policy cues from Beijing and central banks. Any signs of stimulus could bolster the appetite for equities.

To stay ahead of market-moving headlines—follow our live coverage for real-time updates on US-China trade talks, global stimulus policies, and central bank signals.