Asian equities and commodity-linked currencies declined on Monday as U.S. President Donald Trump’s pledge to impose tariffs on steel and aluminum imports fueled market uncertainty. While most regional markets slumped, Hong Kong stocks stood out, rallying on optimism over China’s growing artificial intelligence (AI) sector.
Commodity Currencies and Equities Under Pressure
The Australian dollar, Canadian dollar, and Norwegian krone weakened after Trump’s announcement of a 25% tariff on all steel and aluminum imports, which he plans to formalize early this week. India’s rupee hit a record low, and a broad index of Asian equities slipped for the first time in a week.
Markets remain wary ahead of Federal Reserve Chair Jerome Powell’s semiannual congressional testimony, which could provide insight into how U.S. policymakers view the economic impact of Trump’s tariffs.
“Markets continue to react to Trump policy shifts rather than economic data,” noted Bob Savage, head of markets strategy at BNY. “Powell’s take will be critical in judging the costs of tariffs and their effect on monetary policy.”
Despite global jitters, U.S. stock futures edged higher, while Treasury yields dipped as investors sought safe-haven assets.
Hong Kong Equities Defy the Slump
Hong Kong’s Hang Seng Tech Index bucked the downtrend, reaching its highest level since October. China Telecom Corp. surged 10% in Shanghai, benefiting from rising capital expenditure linked to DeepSeek’s new AI model. Shares of China Mobile Ltd. and China Unicom Hong Kong Ltd. also gained.
Chinese e-commerce stocks advanced after Trump delayed suspending the de minimis exception, which allows low-value packages from China to enter the U.S. duty-free. The U.S. Postal Service’s temporary halt of shipments from China and Hong Kong last week had rattled e-commerce investors, but its swift reversal reassured the market.
“There are still interesting stories in the China market,” said Jin Yuejue, an investment specialist at JPMorgan Asset Management, citing innovation in the tech sector.
Commodity Markets Muted as Investors Await Tariff Details
Global commodity markets remained subdued as traders awaited clarity on Trump’s latest tariffs. Aluminum futures in London slipped to $2,619.50 per ton, while copper was little changed. Meanwhile, gold edged higher toward record levels as investors sought safety in the precious metal.
South Africa’s Rand Falls Amid U.S. Aid Freeze
The South African rand declined after the U.S. froze all aid to the country over Trump’s claims—disputed by Pretoria—of rights violations linked to a land-expropriation law and genocide allegations against Israel. South Africa’s foreign ministry condemned the move, stating that the U.S. order lacked factual accuracy.
Outlook: Uncertainty Dominates as Traders Await Policy Clarity
With global markets on edge, investors will closely watch Powell’s testimony and further trade-related announcements from the White House for signals on how economic policy might shift in the coming weeks.
