After the S&P 500 index rose for the sixth day in a row, regional equity gauges rose 0.4% due to advances in Australia, Japan and South Korea. The Treasury Ministry was stable with the Asian Open after whipping Monday with a downgrade to US debt. The dollar has risen along with US equity index futures. After winning in the previous session, the gold was soaked by 0.2%.
European and US stocks have plated downgrades to US credit ratings after Treasury Secretary Scott Bescent said the government had decided to reduce spending and boost the economy after it downplayed concerns. Asian investors also continue to focus on the outcome of US trade negotiations with India and Japan after talks with China that lowered tariffs boosted optimism.
“The search for fresh market catalysts begins,” said Chris Larkin at Morgan Stanley’s E*Trade. “The S&P 500 ended last week that year. It’s just 3% below the all-time high of 3%. Whether or not it closes that gap in the near future is to maintain past meetings.”
Meanwhile, Beijing accused the Trump administration of undermining recent trade talks in Geneva and warned that using Huawei Technologies Co.’s artificial intelligence chips “anywhere in the world” would violate US export controls. In a statement, the Asian countries’ Commerce Department demanded that the US “fix its mistake.”
India is discussing a three-tranched US trade agreement, and expects to reach a temporary agreement by July before President Donald Trump’s mutual tariffs begin kicking, according to a New Delhi official who is familiar with Australia. Economists and Money Markets are hoping that the RBA will announce a quarterly percentage point cut, bringing the cash rate to 3.85%, the first in two years. Still, they think they may refuse to suggest further mitigation when they show up before journalists later Tuesday.
In Corporate News, Contemporary Amperex Technology Co. Ltd. will begin trading in Hong Kong on Tuesday. The Chinese battery giant will close the world’s biggest list this year, blacklisted by the Pentagon, raising $35.7 billion ($4.6 billion) despite shattering the geopolitical storm.
Back in the US, some strategists said any pullback could be an opportunity to buy.
Thomas Lee of Fundstrat Global Advisors views Moody’s downgrade as “a largely event,” but added that in the case of a weakness in stock, he “will actively buy this.” David Kostin, strategist at Goldman Sachs Group Inc., hopes that the “magnificent seven” group of technology stocks will resume surpassing the broader S&P 500 on robust revenue trends.
Separately, two Federal Reserve officials, including New York Fed chief John Williams, suggested that policymakers may not be prepared to cut interest rates by September to tackle the ambiguous economic outlook.
Federal Reserve Vice Chair Philip Jefferson also highlighted the Atlanta Federal Government’s approach on Monday, waiting for the 2025 financial markets meeting. He said it is important for the Fed to ensure that potential rises in prices do not evolve into a sustained rise in inflation.
Investors are now under 10% chances of interest rate cuts when policymakers next meet in Washington June 17-18. Based on the Fed fund’s futures pricing, investors are hoping to cut two quarter points by the end of the year, from the four seen at the end of April.
In the goods, oil was stable after two days of acquisitions in future meetings between Russia and Ukraine, and the US and Iran.
