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Markets Begin the Week Mixed Amid Global Trade Uncertainty

Asian markets opened the week on a mixed note after Wall Street hit new highs. Tokyo and Shanghai were up, but the Hang Seng and Taiwan’s Taiex were down, reflecting the global uncertainty despite a brief bout of optimism.

Much of the bullishness in the US was triggered by Canada’s about-face on taxing US tech companies, which got trade talks back on track. According to the Associated Press, Canadian Prime Minister Mark Carney said talks were back on, and markets were calm. Result? The S&P 500 rose 0.5% to 6,173.07, the Nasdaq 20,273.46 and the Dow 1% to 43,819.27.

It wasn’t just tech that was driving the rally. Almost every sector in the S&P 500 was up, including Nike, which rose 15.2% despite warning of a tariff hit to earnings. That’s kind of the theme of the week.

In Asia, Japan’s Nikkei 225 was up 0.6% and China’s Shanghai Composite 0.5%, possibly helped by a slight improvement in factory activity after US-China tariffs were postponed in May. But Chinese manufacturing is still in contraction. South Korea’s Kospi and Australia’s ASX were up 0.5% and 0.6% respectively.

But not all markets were optimistic. The Hang Seng was down 0.3%, Taiwan’s Taiex 1.4% and India’s Sensex 0.4%. The divergence suggests investors were quick to react to good news, but many are still cautious about the bigger picture.

And honestly, they should be. Inflation in the US is still rising – May data showed prices rose again, as expected (Reuters). Not an immediate crisis, but it’s keeping pressure on households and clouding earnings forecasts for companies that import. And then there’s the wild card: tariffs. The Wall Street Journal reports the administration has kept 10% baseline tariffs on imports and 25% on China, and more to come. Trump told Fox News he’ll be sending letters to countries soon warning them that penalties will kick in unless deals are signed by July 9. That looming threat has markets, especially in Asia, on high alert.

So yes, US stocks are at records. But it’s hard not to feel like they’re skating on thin ice. One misstep in trade talks, an unexpected inflation spike or a sudden tweet, and this could all reverse. The mixed reaction in Asia seems more like a gut check than hesitation.

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