US Markets Sink on Fed Chair Powell’s Warnings
US equity markets tumbled on Wednesday, April 16, after Fed Chair Powell warned that tariffs could slow growth and fuel inflation. The Nasdaq Composite Index led the losses, sliding 3.07%, while the Dow and the S&P 500 fell 1.73% and 2.24%, respectively.
Nvidia (NVDA) and Advanced Micro Devices (AMD) responded to President Trump restricting chip sales to China, falling 6.87% and 7.35%. Trump also announced fresh tariffs on China and raised the threat of more levies in response to Beijing’s recent retaliatory actions.
The latest escalation in the US-China trade war overshadowed upbeat US economic data. Monthly retail sales jumped 1.4% in March, up from 0.2% in February.
Hang Seng Index Diverges from US Markets
In Asia, the Hang Seng Index rose 1.62% on Thursday morning. Hopes of fresh policy support countered tariff developments, boosting demand for Hong Kong-listed stocks. CN Wire reported:
“China’s Ministry of Commerce, Ministry of Industry and Information Technology, PBOC officials to attend Monday briefing, to detail expansion plan for service sector on Monday.”
Reports of China being open to talks with the US also buoyed sentiment. Real estate and tech shares led the charge.
- The Hang Seng Mainland Properties Index rallied 2.98%, while the Hang Seng Tech Index gained 2.30%.
- Tech giants Alibaba (09988.HK) and Baidu (09888.HK) posted morning gains of 3.13% and 2.24%, respectively.
- EV makers also advanced, with NIO Inc. (09866.HK) and Li Auto Inc. (02015.HK) up 3.95% and 3.69%, respectively.
However, Mainland China’s equity markets were more subdued. The CSI 300 dipped 0.02%, while the Shanghai Composite Index rose 0.21%. Ongoing trade tensions may cap further gains ahead of potential negotiations.
Commenting on reports that Temu and Shein may raise US prices, Brian Tycango of Stansberry Research remarked:
“If you thought you were paying too much in taxes before, just wait until you have to start paying 3x more for a pair of jeans or a nice blouse when you order online.”
Nikkei 225 Gains as Yen Weakens
The Nikkei 225 advanced 0.94% on Thursday, supported by a weaker Yen. The USD/JPY pair gained 0.59% to 142.662, potentially boosting export competitiveness and corporate earnings. Optimism over a possible US-Japan trade deal also lifted sentiment. President Trump commented:
“A great honor to have just met with the Japanese delegation on trade. Big progress!”
Softbank Group Ltd. (9984) gained 0.89%, while Sony Corp. (6758) rallied 1.83%.
ASX 200 Climbs on Commodity Gains
Australia’s ASX 200 rose 0.50% in morning trade, supported by strong commodity prices.
- BHP Group Ltd. (BHP) and Rio Tinto Ltd. (RIO) rallied 1.52% and 2.69%, respectively, as iron ore prices moved higher.
- Northern Star Resources Ltd. (NST) rose 1.11% after gold soared 3.52% overnight and climbed to a morning record high of $3,358.
- Woodside Energy Group Ltd. (WDS) soared 3.6% on gains in WTI oil prices.
Outlook: Tariffs and Central Banks in Focus
Tariff-related developments will likely remain the dominant driver of near-term sentiment. While the threat of escalating tensions could weigh on risk appetite, fresh policy support from Beijing may provide a cushion.
Central bank commentary also requires consideration. Insights into the effect of trade policies on the US economy and Fed rate trajectory could influence market sentiment.
Against this backdrop, investors may need strategies that account for trade-driven volatility. Explore which assets could prove more resilient by reviewing our latest market insights.