Global Markets Brace for Chip Tariff Shockwaves

Asia-Pacific Faces Mixed Open Amid Tariff Uncertainty

Global markets navigated a mixed opening session Thursday, with investors keenly observing the semiconductor sector following a bold tariff announcement from U.S. President Donald Trump. Early trading in Asia saw Japan’s Nikkei 225 index hold steady, while the broader Topix gained a modest 0.19%. South Korea’s Kospi dipped slightly, remaining unchanged.

Tech Stocks Under Scrutiny

The central focus for traders is the potential impact of U.S. President **Donald Trump**’s declaration to impose a staggering 100% duty on imported semiconductors and chips. This measure, however, includes an exemption for companies actively establishing or committing to manufacturing operations within the United States. This policy shift has ignited significant speculation across the tech landscape.

U.S. Futures Show Slight Gains

U.S. equity futures experienced a marginal uptick in early Asian trading hours, signaling a cautious start to the day’s session in North America. This modest movement suggests investors are weighing the implications of the proposed tariffs against other market factors.

Market Openings Signal Caution

In anticipation of the trading day, futures for Hong Kong’s Hang Seng index pointed to a softer opening. Similarly, Australian markets were poised for a weaker start, with the S&P/ASX 200 benchmark futures trading below their previous close. Japan’s Nikkei 225 futures also indicated a lower opening compared to its preceding session’s closing value.

Trump’s Tariff Ultimatum

President **Donald Trump** revealed late Wednesday his intention to implement a significant tariff, stating, “We’re going to be putting a very large tariff on chips and semiconductors.” He further elaborated on the exceptions, noting, “But the good news for companies like Apple is if you’re building in the United States or have committed to build, without question, committed to build in the United States, there will be no charge.” Following this announcement, Apple shares saw a notable surge of 3% in after-hours trading, building on a substantial 5% gain during regular market hours.

The broad S&P 500 index concluded Wednesday’s trading session higher, climbing 0.73% to close at 6,345.06. The tech-heavy Nasdaq Composite demonstrated stronger performance, jumping 1.21% to finish at 21,169.42. The Dow Jones Industrial Average also registered gains, adding 81.38 points, or 0.18%, to end the day at 44,193.12.

Asia-Pacific Markets Show Mixed Opening Signals

Mixed Performance as Investors Eye China’s Rate Decision

Asian markets experienced a divided start to the trading week, with South Korea showing gains while Australia’s benchmark index held steady. Investors are closely anticipating crucial economic data from China later today.

South Korean Stocks Advance

The Kospi index in South Korea opened higher on Monday, rising by 0.45%. In contrast, the Kosdaq, which tracks smaller companies, remained unchanged in early trading. As of 8:10 a.m. Singapore time, trading activity reflected a cautious sentiment across the region.

Australian and Japanese Markets Flat or Closed

Australia’s S&P/ASX 200 benchmark traded flat, mirroring a subdued opening. Japanese markets were closed for the public holiday observance of Marine Day, contributing to the mixed regional picture.

US Futures Show Little Movement

U.S. stock futures experienced minimal changes in early Asian trading hours, suggesting a stable outlook for Wall Street ahead of its opening. This stability comes after a mixed finish for major U.S. indices on Friday.

Friday’s U.S. Market Recap

On Friday, U.S. markets saw a downturn in afternoon trading, with the S&P 500 and Dow Jones Industrial Average ending in negative territory. Fears over escalating tariffs appear to have influenced investor sentiment, leading to a late sell-off.

The Dow Jones Industrial Average, comprising 30 large-cap stocks, fell by 142.30 points, closing at 44,342.19, a decline of 0.32%. The broader S&P 500 index saw a slight decrease of 0.01%, settling at 6,296.79. The tech-heavy Nasdaq Composite managed a modest gain, adding 0.05% to finish at 20,895.66.

Anticipation Builds for China’s Loan Prime Rate

Market participants are keenly awaiting the People’s Bank of China’s announcement on its one-year and five-year loan prime rates for July. This decision is expected to provide insights into China’s economic policy and growth trajectory. For context, China’s central bank last adjusted its benchmark lending rates in June, reflecting ongoing efforts to stimulate economic activity.

Hong Kong and Australia Futures Signal Opening Trends

Futures for Hong Kong’s Hang Seng index indicated a stronger opening, with the contract at 24,883 compared to the previous closing value of 24,825.66. Conversely, Australian S&P/ASX 200 futures pointed to a lower start, trading at 8,688 against its last close of 8,757.20.