Asia-Pacific Stock Markets Rise Following U.S. Court Ruling on Tariffs
Updated: May 29, 2025 | By Amala Balakrishner and Lee Ying Shan
The Asia-Pacific stock markets experienced a positive trajectory on Thursday, largely attributed to a significant ruling from a U.S. federal trade court that challenged former President Donald Trump’s "reciprocal" tariffs and cast doubt on a key element of his economic strategy.
Market Performance Overview
In South Korea, the Kospi index surged by 1.89%, concluding the day at 2,720.64. The Kosdaq, which focuses on smaller companies, also saw a boost, climbing 1.03% to reach 736.29. This optimism followed the Bank of Korea’s announcement to cut its policy interest rate from 2.75% to 2.5%, marking its lowest level since August 2022. The reduction aligns with economists’ forecasts and suggests a proactive approach to stimulate the economy in light of ongoing challenges.
Japan’s Nikkei 225 rose 1.88% to close at 38,432.98, while the Topix index appreciated by 1.53%, closing at 2,812.02. Australia’s S&P/ASX 200 posted a more modest increase, up 0.15% to finish at 8,409.8. Additionally, Hong Kong’s Hang Seng index advanced by 1.06%, and mainland China’s CSI 300 gained 0.6% in its final hour of trading. However, India observed static performance with its benchmark Nifty 50 and BSE Sensex remaining flat as investors assessed other market opportunities.
Investor Focus on Chip Stocks
Market participants are closely monitoring developments in the technology sector, particularly Asian chip manufacturers. This attention comes on the heels of Nvidia’s strong earnings report, which revealed a remarkable 73% year-over-year growth in its data center business. Such results have bolstered investor confidence and spurred discussions about potential gains in the semiconductor market across Asia.
U.S. Market Futures Rise
U.S. stock futures exhibited a positive response to the court ruling and Nvidia’s performance. Futures tied to the S&P 500 surged by 1.44%, while those for the Nasdaq 100 climbed 1.76%. Furthermore, Dow Jones Industrial Average futures added 483 points, reflecting a 1.15% increase. This upbeat sentiment stands in contrast to the previous day’s closing where the major indices ended lower, with the S&P 500 decreasing by 0.56% to close at 5,888.55, the Nasdaq Composite falling by 0.51% to 19,100.94, and the Dow Jones dropping 244.95 points, or 0.58%, to settle at 42,098.70. ### Implications of U.S. Court Ruling
The ruling from the U.S. Court of International Trade directly impacts Trump’s trade policies. A panel of judges concluded that the president overstepped his authority by invoking the International Emergency Economic Powers Act (IEEPA) to impose these tariffs unilaterally. The court clarified that the powers granted by the IEEPA do not extend to implementing broad tariff orders without appropriate legislative backing. This ruling raises questions about the future of U.S. trade policies and their potential implications for global markets.
Oil Prices Respond to Market Conditions
In the commodities market, oil prices saw an uptick following the court’s ruling coupled with concerns regarding Russian oil supplies. U.S. West Texas Intermediate crude increased by 1.31%, trading at $62.65 per barrel, while International Brent crude rose by 1.22% to $65.69 per barrel. Market analysts noted that while gains were recorded, worries about the possibility of U.S. sanctions against Russia, which could disrupt supply routes, tempered the overall increase.
Bank of Korea’s Rate Cut
The decision by the Bank of Korea to lower interest rates for the fourth time was made in an effort to bolster economic growth amidst domestic challenges, including prolonged political instability and the effects of Trump’s tariffs. The cut reflects the central bank’s ongoing strategy to support the economy during uncertain times and underscores the delicate balance policymakers must maintain in navigating both domestic and global economic pressures.
As Asian markets respond to these unfolding events, investors will closely monitor both local and international developments for potential impacts on their investment strategies.
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