Asian equities mostly advanced on Monday, buoyed by Wall Street’s record highs and renewed optimism over global trade negotiations, as countries rush to strike deals with the United States ahead of a key deadline next week.
The rally followed Friday’s gains on the S&P 500 and Nasdaq, which both closed at all-time highs. Investor sentiment was lifted by hopes that several countries could reach agreements to avoid the steep tariffs scheduled to take effect on July 9, after being paused in April to allow time for negotiations.
Japan and India have extended trade talks in Washington, raising the possibility of major agreements with the U.S. Treasury Secretary Scott Bessent added to market confidence, noting that “very good deals” were being offered. Although he acknowledged not all negotiations may conclude by the deadline, he expressed optimism that the bulk could be finalized by Labor Day, September 1.
President Donald Trump, however, said he does not anticipate extending the deadline. In a pre-recorded interview aired Sunday, he stated: “I don’t think I’ll need to. I could, no big deal.”
Meanwhile, Canada signaled a thaw in its trade dispute with Washington, with Finance Minister Francois-Philippe Champagne announcing the withdrawal of tech-focused taxes in hopes of restarting talks. Ottawa confirmed negotiations would resume with the aim of securing a deal by July 21.
Following Wall Street’s lead, major Asian markets including Tokyo, Shanghai, Sydney, Seoul, Singapore, Manila, and Jakarta all posted gains. Tokyo’s tech-led rally continued, supported by the sector’s global momentum.
The dollar weakened further as expectations grew for at least two interest rate cuts by the U.S. Federal Reserve this year. Traders speculated that Trump may soon replace Fed Chair Jerome Powell with someone more aligned with his economic vision.
“Markets are pricing in not just two cuts this year, but a prolonged easing cycle into 2026,” noted Stephen Innes of SPI Asset Management. “Powell may still hold the gavel, but traders expect the next Fed chair to ‘walk, talk, and cut like a dove in MAGA red’.”
Meanwhile, lawmakers in Washington are debating Trump’s proposed tax package — dubbed the “One Big Beautiful Bill” — which would extend his first-term tax cuts and enhance border security. The bill, estimated to cost $4.5 trillion, faces scrutiny over its potential to increase the U.S. deficit by $3.3 trillion over the next decade, according to the Congressional Budget Office.
