Markets Overview
- ASX SPI 200 futures down 0.5% to 8,238.00
- Dow Average up 0.4% to 43,595.17
- Aussie little changed at 0.6356 per US$
- US 10-year yield fell 3.9bps to 4.3926%
- Australia 3-year bond yield fell 6.8 bps to 3.86%
- Australia 10-year bond yield fell 7.5 bps to 4.44%
- Gold spot up 0.5% to $2,949.39
- Brent futures up 0.4% to $74.74/bbl
Economic Events
- 13:45: (AU) RBA’s Jones-Fireside Chat
Asian stocks are poised for hefty losses throughout the region, dragged by a poor session on Wall Street and the Trump administration’s latest moves to curb US trade with China.
Futures point to Hong Kong and Tokyo benchmarks falling around 2% at the open, with Shanghai and Sydney stocks also set to decline. A slide in most megacaps hit the final stretch of US trading as the S&P 500 dropped 0.5%, the Nasdaq 100 lost more than 1%, and the Dow Jones Industrial Average wavered.
Just days before Nvidia Corp.’s results, hedge funds’ net exposure to “Magnificent Seven” stocks hit the lowest since April 2023. The chipmaker lost 3.1%. Microsoft Corp. fell as an analyst said the software giant dropped some AI data-center leases. Apple Inc. rose.
The mood in Asia has also soured in recent days after President Donald Trump rolled out a memorandum telling a key government committee to curb Chinese spending on tech, energy and other strategic American sectors. The administration also called on Mexican officials to place their own levies on Chinese imports.
Alibaba Group Holding Ltd.’s American depositary receipts closed down 10%, the biggest decline since Oct. 2022. The Nasdaq Golden Dragon China Index fell 5.2% with Bilibili Inc. and Kingsoft Cloud Holdings also among stocks that dropped 10% or more.
US investors have started to boost bets that volatility will come back as Nvidia’s earnings on Wednesday could be the first in a whirlwind of events. The US benchmark has gone more than 30 sessions without posting consecutive declines of more than 1%.
“This could be a key week for a stock market that’s mostly been trading sideways for more than two months,” said Chris Larkin at E*Trade from Morgan Stanley.
The yield on 10-year Treasuries slid three basis points to 4.4%. Bonds remained higher after a $69 billion sale of two-year notes drew record demand. Canada’s dollar and Mexico’s peso fell as Trump said he expects tariffs planned on both countries to go ahead next month.
“The market is churning sideways, driven by investor confusion, a natural consolidation period following recent gains, and seasonal weakness in February,” said Mark Hackett at Nationwide. “However, the strong macro backdrop, robust earnings, and healthy fund flows argue for a breakout to the upside once momentum returns.”
Meantime, the Federal Reserve’s preferred inflation gauge is expected to cool to the slowest since June, but glacial progress on taming prices will keep officials cautious. The data is due Friday.
“If we see blowout earnings from Nvidia and softer-than-expected inflation data, that could add upward momentum to stocks,” said Clark Bellin at Bellwether Wealth.
Back in Asia, traders are also studying the consequences of the US proposal to impose fees on the use of commercial ships made in China to counter the nation’s dominance in the production of the vessels. Chinese shipping stocks fell on Monday, while the benchmark CSI 300 Index slipped 0.2%.
Taken with other recent steps, it amounts to the most sweeping, forceful actions targeting Beijing of Trump’s fledgling second term and could complicate a deal to reduce China’s trade surplus with the US that the president has indicated he wants to forge.
In other markets, oil edged higher in a largely aimless session amid a slew of geopolitical uncertainties, including Russia-Ukraine peace talks and a possible increase in Iraqi crude production. Gold touched a fresh record, as exchange-traded funds backed by the precious metal draw renewed interest from investors.
