Asian stocks ended mixed on Tuesday, as initial euphoria over the U.S.-China trade deal faded and investors lowered their bets of Federal Reserve rate cuts this year.
Uncertainty lingered and there was apprehension over whether anything durable would come out of the trade talks after a 90-day tariff suspension.
Ratings agency Fitch said that the U.S. effective tariff rate is now reduced to 13.1 percent from 22.8 percent prior to the agreement but still at levels unseen since 1941 and much higher than the 2.3 percent it was at the end of 2024.
Global free trade is in crisis, the head of the World Trade Organization chief said while meeting Japanese Prime Minister Shigaru Ishiba earlier today.
The dollar wobbled ahead of closely monitored U.S. inflation data due later in the day.
Gold rose nearly 1 percent after hitting a more than one-week low in the previous session. Oil prices held steady after reaching a two-week high in the previous session as fears of a U.S. recession eased.
China's Shanghai Composite Index edged up 0.2 percent to 3,374.87 despite a majority of defense company shares falling sharply following the ceasefire announcement between India and Pakistan.
Meanwhile, in his first public remarks since U.S.-China trade talks over the weekend, Chinese President Xi Jinping told leaders from Latin America and the Caribbean that "bullying or hegemonism only leads to self-isolation."
Hong Kong's Hang Seng Index tumbled 1.9 percent to 23,108.27, with Alibaba, JD.com and Baidu leading losses.
Japanese markets hit a three-month high as a weaker yen boosted exporters such as electronics makers and auto stocks. Sony advanced 1.7 percent and Nissan Motor jumped 3 percent. In the tech sector, Tokyo Electron soared 4.9 percent.
The Nikkei 225 Index jumped 1.4 percent to 38,183.26. The broader Topix Index settled 1.1 percent higher at 2,772.14, rising for a 13th straight day and posting its longest winning streak in 16 years.
Seoul stocks ended on a flat note after a choppy session. The Kospi finished marginally higher at 2,608.42, with Samsung SDI and LG Energy Solution rising 2-3 percent.
Australian markets eked out modest gains to reach an 11-week high, with tech and energy stocks leading the way.
The benchmark S&P/ASX 200 Index rose 0.4 percent to 8,269, rising for a fifth straight session ahead of a possible RBA rate cut. The broader All Ordinaries Index gained 0.5 percent to close at 8,510.70.
Across the Tasman, New Zealand's benchmark S&P/NZX-50 Index advanced 0.9 percent to 12,786.74.
U.S. stocks surged overnight as Washington and Beijing agreed to drastically reduce the massive tariffs on each other's goods for 90 days following negotiations over the weekend in Switzerland.
The so-called "reciprocal" tariffs that each country had imposed on one another would be cut to 10 percent during the 90-day period, while a separate 20 percent tariff imposed in response to the fentanyl national emergency remains in place, resulting in an effective tariff rate on Chinese goods of 30 percent.
Both nations also agreed to establish a mechanism to continue important discussions about trade and economics.
The tech-heavy Nasdaq Composite soared 4.4 percent and the S&P 500 rallied 3.3 percent to reach their best closing levels in over two months, while the Dow surged 2.8 percent.
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June 06, 2025 14:30 ET Survey data and official reports on manufacturing and the labor market were among the main news from the U.S. economy this week. The policy decision announcement in Canada was also in focus. Similarly, the European Central Bank rate decision was the main news in Europe. In Asia, private sector survey data from China gained attention in the backdrop of the uncertainty created by trade tariffs.