Asian shares were mostly higher Tuesday after Wall Street rallied on the U.S. decision to give Chinese telecom giant Huawei another 90 days to buy equipment from American suppliers.
That decision appeared to inspire a buying mood among investors eager for any signs of progress in the trade war between the U.S. and China.
Japan’s benchmark Nikkei 225 gained 0.4% in morning trading to 20,653.93. Australia’s S&P/ASX 200 added nearly 0.7% to 6,510.40. South Korea’s Kospi rose 0.3% to 1,946.30, while Hong Kong’s Hang Seng lost 0.2% to 26,234.85. The Shanghai Composite was little changed, inching down less than 0.1% at 2,881.06.
On Wall Street, the S&P 500 climbed 34.97 points, or 1.2%, to 2,923.65. The Dow Jones Industrial Average rose 249.78 points, or 1%, to 26,135.79. The index briefly gained 336 points. The Nasdaq, which is heavily weighted with technology stocks, rose 106.82 points, or 1.3%, to 8,002.81. Smaller company stocks also had a good day. The Russell 2000 index gained 15.21 points, or 1%, to 1,508.85.
Recently investors have been trying to determine whether a recession is on the horizon in the U.S. A key concern is that the escalating and costly trade conflict between the world’s two biggest economies will hamper growth around the globe.
Earlier this month, Trump announced plans to extend tariffs across virtually all Chinese imports, many of them consumer products that were exempt from early rounds of tariffs. The tariffs have been delayed, but ultimately will raise costs for U.S. companies bringing goods in from China.
Huawei has become part of the trade war, with the White House showing a willingness to use sanctions against the company as a bargaining chip. The U.S. government blacklisted Huawei in May, deeming it a national security risk, meaning U.S. firms aren’t allowed to sell the company technology without government approval.
“While it is not unexpected, the extension for the easing of Huawei sanctions had added to the relief for markets at the start of the week,” said Jingyi Pan, market strategist for IG in Singapore.