Shares logged modest gains in most world markets on Tuesday as the initial euphoria over the 90-day truce in the trade war between the United States and China faded.
Investors were sobered after Monday’s rallies by longer term worries, as analysts warned President Donald Trump’s policies could still change.
The future for the S&P 500 slipped 0.4% while that for the Dow Jones Industrial Average fell 0.2%. On Monday, stocks soared on Wall Street after the United States said in a joint statement with China that it will cut tariffs on Chinese goods to 30% from as high as 145%, for 90 days.
China, meanwhile, said its tariffs on U.S. goods will fall to 10% from 125%. The agreement allows time for more talks following the weekend’s negotiations in Geneva, Switzerland, which the U.S. side said yielded “ substantial progress.”
The outcome surpassed most expectations, reassuring investors, said Stephen Innes of SPI Asset Management.
“Make no mistake, this was highly stage-managed diplomacy. But the optics are good and the implications real. It signals that even this administration recognizes the economic drag of unrelenting tariffs,” he said in a commentary.
Still, big challenges remain in the negotiations between Beijing and Washington and many countries have yet to negotiate tariff-alleviating deals of their own.
“I think investors are aware that the trade deal is not done yet. It’s not done deal yet," said Louis Wong, director for Phillip Securities Group in Hong Kong. "I would advise investors to remain cautious in the near term and to be prepared for unexpected news from the trade front,” he added.
European markets edged higher, with Germany's DAX down less than 0.1% at 23,563.93. The CAC 40 in Paris gained 0.2% to 7,863.60, while Britain's FTSE 100 climbed less than 0.1% to 8,609.27.
Beijing's anger over the trade war remained apparent. Speaking to officials from China and Latin America on Tuesday, leader Xi Jinping reiterated China's stance that nobody wins a trade war and that “Bullying or hegemonism only leads to self-isolation.”
Tokyo's Nikkei 225 jumped 1.4% to 38,183.26. Automakers were among the big gainers after the U.S. dollar surged against the Japanese yen. Toyota Motor Corp. gained 3.5% and Suzuki Motor Corp. was 2.4% higher.
Nissan Motor Co. added 3% ahead of an announcement that it plans to lay off 20,000 of its workers as part of its restructuring efforts. The automaker said Tuesday that it racked up a loss of 670.9 billion yen ($4.5 billion) in the last fiscal year.
The Kospi in South Korea was nearly unchanged at 2,608.42.
Hong Kong's Hang Seng, which gained 3% a day earlier after Chinese and U.S. officials announced the agreement to pause tariffs and reduce them, fell 1.9% to 23,108.27 on heavy selling of technology shares.
The Shanghai Composite index edged 0.2% higher to 3,374.87 and Taiwan's Taiex jumped 1%.
India's Sensex fell 1.5%.
In Australia, the S&P/ASX 200 climbed 0.4% to 8,2769.00.
On Monday, the tariffs agreement between the world's two biggest economies propelled the S&P 500 up 3.3% to within 5% of its all-time high set in February. It had fallen nearly 20% below that mark but bounced back last month on hopes that President Donald Trump will lower his tariffs after reaching trade deals with other countries.
The index at the heart of many 401(k) accounts is back above where it was on April 2, Trump’s “Liberation Day,” when he announced stiff worldwide tariffs that ignited worries about a potentially self-inflicted recession.
The Dow Jones Industrial Average jumped 2.8% and the Nasdaq composite surged 4.3%.
Oil prices slipped Tuesday after a rally on Monday. U.S. benchmark crude oil gave up 15 cents to $61.80 per barrel. Brent crude, the international standard, shed 18 cents to $64.78 per barrel.
The U.S. dollar had strengthened Monday against everything from the euro to the Japanese yen to the Swiss franc. By early Tuesday, the dollar was trading at 147.93 Japanese yen, down from 148.47 yen. But it gained against the euro, climbing to $1.1104 from $1.1088.
Economic reports scheduled for later this week, including on inflation and sentiment among U.S. consumers, could show how much damage uncertainty over tariffs has caused the economy.
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Associated Press video journalist Alice Fung contributed from Hong Kong.
Elaine Kurtenbach, The Associated Press
