Asian equities climb: Investors weigh US-China trade tensions, Fed rate cut expectations; gold rallies

edged higher on Thursday as investors weighed escalating tensions in the alongside expectations that the will continue cutting interest rates this year.

The region’s gains follow a broadly positive session on Wall Street and mark a second consecutive day of recovery, as traders focused on softer US economic data and central bank signals that may favour further monetary easing.

Trump reignites trade war fears

Markets have been volatile this week after US President Donald Trump threatened 100% tariffs on Chinese goods in retaliation for Beijing’s new rare-earth export controls.

When asked about the possibility of a prolonged trade conflict, Trump bluntly told reporters, “Well, you’re in one now… We have a 100 percent tariff. If we didn’t have tariffs, we would be exposed as being a nothing.”

Despite the hawkish tone, treasury secretary Scott Bessent suggested a more conciliatory approach, proposing a potential extension of the tariff truce if Beijing delays its rare-earth restrictions.

Trump still plans to meet Chinese President Xi Jinping at the Asia-Pacific Economic Cooperation summit in South Korea later this month.

Fed rate cut expectations support markets

Investors were also encouraged by data from the Fed’s “Beige Book” survey, which pointed to a softer US job market, echoing other recent weak economic indicators. Fed chair Jerome Powell had warned earlier this week that “the downside risks to employment appear to have risen,” reinforcing market bets on additional rate cuts.

Economists, however, remain cautious. Bank of America noted that uncertainties persist over trade, inflation, growth, and US policy, including healthcare and drug pricing.

Safe-haven assets climb

The combination of trade war jitters, rate cut expectations, and a weaker dollar pushed gold to new daily records, reaching $4,234.70 on Thursday.

Key market figures

• India – Sensex: UP 0.56% at 83,064.09; Nifty 50: UP 0.54% at 25,459.70 (at 12 pm)
• Tokyo – Nikkei 225: UP 0.9% at 48,088.07
• Hong Kong – Hang Seng: UP 0.2% at 25,953.67
• Shanghai – Composite: UP 0.1% at 3,914.85
• Euro/USD: UP to $1.1670 from $1.1645
• Pound/USD: UP to $1.3436 from $1.3400
• Dollar/Yen: DOWN to 150.54 from 151.24
• WTI crude: UP 0.8% at $58.71/bbl
• Brent crude: UP 0.7% at $62.34/bbl
• New York – Dow Jones: FLAT at 46,253.31
• London – FTSE 100: DOWN 0.3% at 9,424.75

Markets in Sydney, Seoul, Wellington, Taipei, and Manila also posted gains as traders balanced geopolitical risks with hopes for accommodative US monetary policy.