Asian equity markets demonstrated remarkable resilience on Tuesday, posting broad gains despite escalating trade tensions between the United States and South Korea. The positive momentum followed an upward trajectory on Wall Street, where robust corporate earnings reports continued to fuel investor optimism.
Japan’s Nikkei 225 advanced 0.9% to close at 53,333.54, while South Korea’s Kospi delivered a particularly impressive performance with a 2.7% surge to 5,084.85. This substantial gain occurred despite former President Donald Trump’s announcement of impending tariff increases on South Korean goods, including automobiles, lumber, and pharmaceutical products. Trump declared via social media that rates on certain goods would escalate from 15% to 25%, citing insufficient progress on trade framework implementation.
The South Korean government responded with diplomatic urgency, confirming high-level meetings with U.S. officials. Industry Minister Kim Jung-Kwan will engage with Commerce Secretary Howard Lutnick, while Trade Minister Yeo Han-koo prepares for separate discussions with Trade Representative Jamieson Greer. The presidential office reiterated its commitment to implementing last year’s trade agreement.
Technology stocks emerged as the primary drivers of South Korea’s market performance. Samsung Electronics climbed 4.9%, and semiconductor manufacturer SK Hynix soared 8.7%, effectively counterbalancing losses in the automotive sector where Kia Corp. declined 1.1% and Hyundai Motor Co. dropped 0.8%.
Other Asian markets showed mixed but generally positive results. Hong Kong’s Hang Seng Index gained 1.3% to reach 27,106.83, while China’s Shanghai Composite added 0.2% to 4,139.90. Taiwan’s Taiex advanced 0.8%, and India’s Sensex edged 0.1% higher. Only Shenzhen’s smaller market benchmark experienced a slight decline of 0.1%.
Investors now turn their attention to the Federal Reserve’s impending interest rate decision scheduled for Wednesday. While the central bank is expected to maintain current rates, market participants anticipate potential cuts in 2026 to stimulate economic growth. The persistent inflation exceeding the Fed’s 2% target complicates monetary policy decisions.
This week also brings earnings reports from several technology titans including Meta Platforms, Microsoft, Tesla, and Apple, which could significantly influence market direction. Precious metals continued their ascent with gold adding 0.2% to $5,089.70 per ounce after briefly surpassing $5,100 for the first time, reflecting investor caution amid geopolitical uncertainties.