Global equities diverged and the dollar dipped as uncertainty surrounding President Donald Trump's tariffs gripped markets. The US Supreme Court struck down a significant portion of the president's trade policy, ruling that Trump lacks the authority under a 1977 law to impose tariffs on individual countries.
Trump responded by vowing to impose a global tariff of 10 percent, later raising it to 15 percent. Wall Street and major European markets retreated due to increased economic and political uncertainty. However, Asian markets saw a boost, as the revised tariff rate offers a reduction for several key exporting nations, including Brazil, China, India, Canada, and Mexico.
China urged the United States to cancel the new tariffs, which are set to take effect with exemptions for some products and expire in 150 days unless extended by Congress. The European Union has put a key trade deal with the US on hold pending clarity on the new tariffs' impact. Indian trade officials have also postponed a trip to finalize an interim agreement.
Asian investors welcomed the Supreme Court's decision, with tech firms leading gains. Hong Kong's market rose over two percent, driven by e-commerce giants. Seoul hit a record high, boosted by chipmakers, while Singapore, Wellington, Taipei, Mumbai, Bangkok, and Manila also saw gains. Sydney dipped.
Elsewhere, oil prices rose amid concerns over potential US military action in Iran, following Trump's deployment of military hardware to the Middle East. The VIX, a measure of market volatility, also increased.