Trump's 100% pharma duty fuels Asia selloff; tech losses mirror U.S. AI jitters

[Stock ticker with index changes of the global markets.]
Torsten Asmus

Asia stocks trade mostly in red on Friday after Wall Street’s record-breaking rally stalled overnight amid mixed signals from Fed officials on potential interest rate cuts and concerns over lofty valuations. Global sentiment also weakened after US President Donald Trump unveiled new tariffs on furniture, heavy trucks and pharmaceuticals. Losses in technology stocks– which fell in tandem with their U.S. peers amid uncertainty over the sustainability of the artificial intelligence trade, also pressured Asian markets.

President Trump on Thursday proposed a 100% levy on branded pharmaceuticals not made in the U.S., a 25% tariff on heavy trucks, and duties of up to 50% on furniture.

The move heralds substantially more pressure on Asian pharma exporters, with a bulk of regional companies having heavy exposure to U.S. markets.

Silver slipped below $45 per ounce on Friday, easing from 14-year highs. Gold prices eased to around $3,740 per ounce on Friday.

Japan (NKY:IND [https://seekingalpha.com/symbol/NKY:IND]) fell 0.55% to around 45,600 on Friday, snapping a three-day rally. The Japanese yen [https://seekingalpha.com/symbol/USD:JPY#hasComeFromMpArticle=false#source=section%3Amain_content%7Cbutton%3Abody_link%7Cfirst_level_url%3Anews] hovered around 150 per dollar on Friday, its weakest level in nearly two months.

Tokyo announced on Friday it will establish an investment facility at the state-owned Japan Bank for International Cooperation to support a USD 550 billion investment package under its tariff deal with the U.S, to fund overseas expansions by Japanese firms in industries critical to Japan’s economic security.

In Japan, Tokyo’s core inflation rose 2.5% in September, steady from August but below forecasts of 2.8%.

China (SHCOMP [https://seekingalpha.com/symbol/SHCOMP]) fell 0.33% to around 3,840 while the Shenzhen Component lost 0.7% to 13,350 on Friday, and the offshore yuan [https://seekingalpha.com/symbol/USD:CNY#source=url_first_level%3Amarket-news%7Csection%3Aglobal%7Csection_asset%3Afull_story%7Cbutton%3Abody_link] steadied around 7.14 per dollar on Friday but remained on course for substantial weekly losses.

China’s Commerce Ministry initiated an anti-dumping investigation into pecans imported from the US and Mexico on Thursday, signaling rising global trade tensions and increased friction with the two North American nations, Reuters reported.

Separately, China launched an investigation on Thursday into Mexico’s tariffs and other trade-restrictive measures targeting Chinese goods.

President Donald Trump on Thursday signed an executive order approving a deal to keep TikTok operating in the U.S., with Vice President JD Vance saying it values the business at USD 14 billion.

Chinese Premier Li Qiang on Thursday urged that China and the U.S. must “find the right way to get along in the new era,” calling their ties “the most important bilateral relations in the world.”

The European Commission plans to impose tariffs of 25% to 50% on Chinese steel and related products in the coming weeks, Handelsblatt reported, citing senior officials in Brussels, as quoted by Reuters.

Investors now await industrial profits and PMI data next week for fresh signals on the health of the world’s second-largest economy.

Hong Kong (HSI [https://seekingalpha.com/symbol/HSI]) fell 0.62% to 26,240 in Friday morning deals, extending losses from the prior session.

Losses were partly offset by August trade data showing Hong Kong’s exports jumped 14.5% yoy while imports rose at a slower 11.5%.

India (SENSEX [https://seekingalpha.com/symbol/SENSEX]) fell 0.41%

Australia (AS51 [https://seekingalpha.com/symbol/AS51]) rose 0.02% to below 8,760 on Friday, reversing the prior session’s gains, as sentiment was hit by US President Donald Trump’s announcement of fresh tariffs. The Australian dollar [https://seekingalpha.com/symbol/AUD:USD#hasComeFromMpArticle=false#source=section%3Amain_content%7Cbutton%3Abody_link%7Cfirst_level_url%3Anews] held its recent declines to around $0.654 on Friday, after two consecutive sessions of losses.

In the U.S. on Thursday, all three major indexes ended lower [https://seekingalpha.com/news/4499030-wall-street-dow-sp500-nasdaq] for a third session, as investors weighed strong economic data against expectations for future Federal Reserve rate cuts.

U.S. stock futures were little changed on Friday as investors awaited the latest PCE price index, the Federal Reserve’s preferred inflation gauge, for further clarity on the rates' outlook: Dow +0.05%; S&P 500 -0.01%; Nasdaq -0.12%.

CURRENCIES: (JPY:USD [https://seekingalpha.com/symbol/JPY:USD]), (CNY:USD [https://seekingalpha.com/symbol/CNY:USD]), (AUD:USD [https://seekingalpha.com/symbol/AUD:USD]), (INR:USD [https://seekingalpha.com/symbol/INR:USD]), (HKD:USD [https://seekingalpha.com/symbol/HKD:USD]), (NZD:USD [https://seekingalpha.com/symbol/NZD:USD]).

MORE ON ASIA:

BoJ minutes reveal board open to future rate hikes despite steady policy [https://seekingalpha.com/news/4498664-boj-minutes-reveal-board-open-to-future-rate-hikes-despite-steady-policy#source=url_first_level%3Amarket-news%7Csection%3Amarket-pulse%7Csection_asset%3Anews_title]

Australian CPI rises to 3.0% in August exceeds forecast, hits highest level in a year [https://seekingalpha.com/news/4498185-australian-cpi-rises-to-30-in-august-exceeds-forecast-hits-highest-level-in-a-year#source=url_first_level%3Amarket-news%7Csection%3Amarket-pulse%7Csection_asset%3Anews_title]

Japan's manufacturing sector remains in contraction to 48.4, services growth slows in September [https://seekingalpha.com/news/4498187-japans-manufacturing-sector-remains-in-contraction-to-484-services-growth-slows-in-september#source=url_first_level%3Amarket-news%7Csection%3Amarket-pulse%7Csection_asset%3Anews_title]

Australia manufacturing, services PMI growth slows in September [https://seekingalpha.com/news/4497497-australia-manufacturing-services-pmi-growth-slows-in-september#source=url_first_level%3Amarket-news%7Csection%3Amarket-pulse%7Csection_asset%3Anews_title]

PBOC holds rates steady for fourth straight month, despite economic slump [https://seekingalpha.com/news/4496828-pboc-holds-rates-steady-for-fourth-straight-month-despite-economic-slump#source=url_first_level%3Amarket-news%7Csection%3Amarket-pulse%7Csection_asset%3Anews_title]