Asian stock markets have stuttered in early trade as a selloff on Wall Street overnight rattled investors, with sentiment hurt by heightened uncertainty over US President Donald Trump’s tariff policy and rising geopolitical tensions.
MSCI’s broadest index of Asia-Pacific shares outside Japan flipped from gains to losses following a six-day rally, and was last down 0.2 per cent on Tuesday, led by declines in South Korea.
The Nikkei 225 advanced 0.7 per cent as Japanese markets returned after a holiday. S&P 500 e-mini futures were up 0.1 per cent.
Stock market momentum “has been under pressure with increased concerns around the AI trade and escalation in geopolitical and trade uncertainty”, analysts from Bernstein wrote in a research report.
Trump warned on Monday countries against backing away from recently negotiated trade deals with the US after the Supreme Court struck down his emergency tariffs, saying that he would hit them with much higher duties under different trade laws.
The new tariffs are based on Section 122 of the Trade Act of 1974, causing further confusion in markets trying to come to grips with US protectionist policies.
Overnight, the S&P 500 was down 1.0 per cent, erasing the past week of gains, as fears over the displacement effects of AI on software and other industries pushed the Nasdaq Composite 1.1 per cent lower.
A bearish report from Citrini Research on the possible risks to the global economy took a further toll on jittery investor sentiment.
The CBOE Volatility Index, commonly known as the VIX, rose 1.9 percentage points to 21.01.
Japan and China are returning from holidays on Tuesday, adding to liquidity in regional markets.
Against the yen, the US dollar was 0.1 per cent stronger at 154.77 yen. The Chinese yuan was unchanged at 6.889 yuan in offshore trade.
Fed funds futures are pricing an implied 95.5 per cent probability that the US central bank will remain on hold at its next two-day meeting on March 18, little changed from a day earlier, according to the CME Group’s FedWatch tool.
The yield on the US 10-year Treasury bond was up 0.6 basis point at 4.029 per cent as investors pondered the implications of the Supreme Court’s decision on US tax receipts.
In commodities markets, WTI crude edged down 0.1 per cent to $US66.23 ($A93.85), as tensions continued to simmer between the US and Iran.
On Monday, a senior State Department official said the department is pulling out non-essential government personnel and their eligible family members from the US embassy in Lebanon, amid growing concerns about the risk of a military conflict.
All of this uneasiness pushed the safe-haven gold up 0.3 per cent to $US5,244.96 ($A7,432.54), while silver slipped 0.1 per cent to $US88.12 ($A124.87).
Bitcoin climbed 0.4 per cent to $US64,832.48 ($A91,872.97), while ether was down 0.1 per cent at $US1,861.22 ($A2,637.50).