Asian shares mostly rise as region continues watching Trump’s latest

TOKYO – Asian shares mostly rose Wednesday, as regional markets continued to watch President Donald Trump’s latest tariff escalation.

Investors remained uncertain about what the impact of the policies might be. The latest from Trump is his announcement of 25% tariffs on all foreign steel and aluminum coming into the U.S.

South Korea, and to a lesser extent Japan, export steel to the U.S., but the impact on their economies might not be that big since both nations export more in other goods to the U.S.

Last month, Trump decided to impose 10% duties on all Chinese imports.

Japan’s benchmark Nikkei 225 rose 0.2% in afternoon trading to 38,864.96. Australia’s S&P/ASX 200 gained 0.4% to 8,519.40. South Korea’s Kospi edged up 0.3% to 2,546.41.

Hong Kong’s Hang Seng jumped 1.6% to 21,626.80, as excitement over DeepSeek continued, although market watchers are wondering when the rally might peak. The Shanghai Composite slipped less than 0.1% to 3,317.83.

The moves on Wall Street were modest not only for U.S. stocks but also in the bond market, where Treasury yields rose by only a bit.

The threat of a possible trade war is real, with high potential stakes. Most of Wall Street agrees that substantial and sustained tariffs would push up prices for U.S. households and ultimately lead to big pain for financial markets around the world.

But trading remained mostly calm in part because Trump has shown he can be quick to pull back on such threats. That’s what he did earlier with 25% tariffs he had announced for all imports from Canada and Mexico, suggesting tariffs may be merely a negotiating chip rather than a true long-term policy. That in turn has much of Wall Street hoping the worst-case scenario may not happen.

“The metal tariffs may serve as negotiating leverage,” according to Solita Marcelli, chief investment officer for the Americas at UBS Global Wealth Management.

Federal Reserve Chair Jerome Powell said again in testimony on Capitol Hill Tuesday that the Fed is in no hurry to ease interest rates any further.

The Fed had cut its main interest rate sharply through the end of last year, hoping to give a boost to the economy. But worries about inflation potentially staying stubbornly high have forced the Fed and traders alike to cut back expectations for cuts in 2025. Some traders are even betting on the possibility of no rate cuts, in part because of worries about the effects of tariffs.

“We’re in a pretty good place,” Powell said about where the economy and interest rates are currently. He said again he’s aware that going too slowly on rate cuts could damage the economy, while moving too quickly could push inflation higher.

Higher rates tend to put downward pressure on prices for stocks and other investments, while pressuring the economy by making borrowing more expensive. That could be risky for a U.S. stock market that critics say already looks too expensive. The S&P 500 is not far from its all-time high set late last month.

One way companies can offset such downward pressure on their stock prices is to deliver stronger profits. And big U.S. companies have been mostly doing just that recently, as they report how much profit they made during the last three months of 2024. That, though, hasn’t always been enough.

Coca-Cola rallied 4.7% after reporting stronger profit and revenue than analysts expected. Growth in China, Brazil and the United States helped lead the way. DuPont climbed 6.8% after the chemical company likewise reported better profit than Wall Street expected.

All told, the S&P 500 rose 2.06 points, or less than 0.1%, to 6,068.50. The Dow Jones Industrial Average rose 123.24, or 0.3%, to 44,593.65, and the Nasdaq composite fell 70.41, or 0.4%, to 19,643.86.

In the bond market, the yield on the 10-year Treasury rose to 4.53% from 4.50% late Monday. The two-year Treasury yield, which moves more closely with expectations for upcoming action by the Fed, held steady. It remained at 4.28%, where it was late Monday.

In energy trading, benchmark U.S. crude fell 29 cents to $73.03 a barrel. Brent crude, the international standard, declined 27 cents to $76.73 a barrel.

In currency trading, the U.S. dollar edged up to 153.64 Japanese yen from 152.43 yen. The euro was unchanged at $1.0363.

___ AP Business Writer Stan Choe contributed.