Asian stock markets soared on Tuesday after the United States and China agreed to a 90-day halt in their trade war, easing recession fears and fuelling a region-wide buying spree.
Asian equities rallied strongly on Tuesday following the announcement of a 90-day ceasefire in the ongoing U.S.-China trade war. The agreement, which includes rolling back steep tariffs on both sides, gave a boost to investor sentiment and triggered widespread gains across regional markets.
Japan’s Nikkei 225 jumped 2 percent, reaching its highest level since February 25. Taiwan’s tech-focused Taiex mirrored that performance, while mainland Chinese indices also opened higher. The positive momentum lifted the MSCI Asia-Pacific ex-Japan index to a six-month high.
The upbeat mood in Asia tracked the overnight surge on Wall Street, where the S&P 500 surged more than 3 percent and the Nasdaq Composite soared by 4.3 percent. The market rally followed confirmation from trade negotiators that U.S. tariffs on Chinese goods would be reduced from 145 percent to 30 percent, and Chinese tariffs on American imports would be lowered from 125 percent to 10 percent during the 90-day truce period.
Investors welcomed the tariff reductions as a signal that both Washington and Beijing are serious about preventing further economic fallout while working through deeper issues, including technology transfers and market access.
Despite the relief rally, some analysts remained cautious. They noted that the average effective U.S. tariff rate still exceeds 13 percent - its highest level since the early 1940s. Fitch Ratings added that economic uncertainty remains, particularly around consumer and business spending.
With key U.S. inflation data expected later today and the 90-day ceasefire set to expire in August, traders are closely watching for signs that both sides can turn this temporary pause into a more permanent resolution. Until then, markets may remain sensitive to any shifts in trade negotiations.
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