Asian Markets Trade In Narrow Range Amid Economic Uncertainty

Asian stocks fluctuated within a tight range on Wednesday as investors weighed weaker U.S. consumer confidence and ongoing uncertainty surrounding President Donald Trump’s impending tariffs. The MSCI Asia Pacific Index broke a three-day losing streak, posting a modest 0.3% gain despite losing early momentum. Meanwhile, U.S. copper prices surged to a record high amid concerns over potential import tariffs.

Equity futures in the U.S. and Europe remained steady, while the 10-year U.S. Treasury yield inched higher. The U.S. dollar held steady after pausing a four-day rally on Tuesday.

Tariff Uncertainty and Market Response

Earlier this month, the Trump administration signaled that forthcoming tariffs might be less extensive and more precisely targeted than initially anticipated. On Tuesday, Trump reinforced this stance, stating that while he aims to limit exemptions, the tariffs would likely be “more lenient than reciprocal” to avoid excessively stringent trade measures.

While Trump’s remarks offered some reassurance, weak U.S. economic data fueled concerns about growth prospects. Despite this, strategists from Morgan Stanley and Goldman Sachs expressed optimism regarding Chinese stocks, citing improving earnings forecasts as a key driver.

“There’s an elevated baseline anxiety in the markets ahead of next week’s announcements,” said Kyle Rodda, senior market analyst at Capital. “However, some relief comes from Trump’s indication of more focused trade restrictions.”

Trump is set to announce a “Liberation Day” tariff package on April 2, introducing so-called reciprocal tariffs in response to levies imposed by other nations, including key U.S. allies. Sources familiar with the matter suggest that while the announcement will significantly expand U.S. tariffs, it will be more targeted than previously speculated.

Market Reactions and Economic Outlook

Amid the uncertainty, Chinese technology stocks rebounded, with the Hang Seng Tech Index climbing as much as 1.6% on Wednesday following a near-correction in the previous session. Morgan Stanley strategists raised their 2025 year-end targets for Chinese stocks, while Goldman Sachs analysts pointed to positive earnings revisions as a source of further upside potential.

“Chinese stocks are taking a breather, but I don’t think this is the end,” said Vey-Sern Ling, managing director at Union Bancaire Privée. “Valuations remain attractive, government support for technology and consumption persists, and innovation continues to thrive.”

Geopolitical Developments and Inflation Concerns

On the geopolitical front, the U.S. announced that Russia and Ukraine had agreed to a ceasefire in the Black Sea. However, the Kremlin maintained that its participation depended on preconditions, including relief from Western sanctions. Additionally, the U.S. committed to facilitating Russia’s access to global markets for agricultural and fertilizer exports while working to lower maritime insurance costs and improve port and payment system access.

Consumer sentiment in the U.S. has remained weak, with households wary of inflationary pressures linked to Trump’s tariffs. Businesses have signaled concerns over potential price increases and declining demand, aligning with economists’ warnings about stagflation risks and rising recession probabilities.

“Sentiment among investors, consumers, and businesses continues to decline as economic concerns and policy uncertainty take their toll,” said Bret Kenwell of eToro. “Until there’s more clarity on tariffs and macroeconomic policy, confidence remains fragile.”