Asian Markets Surge as Trade Optimism and Corporate Earnings Boost Confidence

Asian stocks rallied on Thursday as growing optimism surrounding trade agreements and strong corporate earnings lifted investor confidence across global markets. The MSCI Asia-Pacific index outside Japan climbed 0.4%, reaching its highest level in nearly four years. Buoyed by Wall Street’s strong performance, regional indices such as Japan’s Topix, Singapore’s STI, and the Nikkei 225 pushed higher, with the Nikkei approaching its all-time record. European futures also pointed to continued gains, suggesting a broadly positive global market sentiment.

A major driver of the rally was the growing belief that the U.S. is on the verge of finalizing a trade agreement with the European Union. This comes after President Trump’s administration secured deals earlier in the week with Japan, the Philippines, and Indonesia. Market strategists noted that the momentum from these agreements is reducing investor caution, fueling a rise in both stock prices and bond yields. The prospect of a 15% tariff replacing higher EU duties also appeared to ease trade anxieties.

Meanwhile, attention turned to Washington, where President Trump is set to make an unusual visit to the Federal Reserve—a move viewed by analysts as an attempt to pressure Fed Chair Jerome Powell ahead of the upcoming policy meeting. While the Fed is expected to keep rates steady, Trump’s appearance introduces an element of political tension. Treasury yields remained stable, with the 10-year note holding at 4.39% and the dollar weakening slightly against the yen and euro.

U.S. equity markets extended their gains Wednesday, with the Dow Jones up over 1%, and the S&P 500 and Nasdaq posting solid advances. Corporate earnings added to the bullish mood; 85% of S&P 500 companies that have reported so far have exceeded expectations. Positive earnings reports from Asian tech giants like SK Hynix and Infosys reinforced optimism in the region despite broader trade uncertainties.

On the commodities front, oil prices ticked higher amid expectations that a successful trade deal could support global economic growth. A surprise drawdown in U.S. crude inventories added further support to energy prices. Gold prices, on the other hand, dipped slightly as investors moved away from safe-haven assets amid easing trade tensions, despite the backdrop of a weaker dollar. Market participants are now closely watching the European Central Bank’s decision, with no rate change expected but another cut likely by year-end.

Source: Reuters