Asia market rise as U.S. China trade tensions escalate

October 15, 2025 (MLN): Asia market advanced on Wednesday, shrugging off overnight declines on Wall Street as investors weighed escalating trade tensions between the United States and China along with fresh signs of economic weakness in Beijing.

Global markets were rattled after U.S. President Donald Trump sharply criticized China for failing to purchase American soybeans, calling it an “economically hostile act.” He also threatened “retribution,” including a potential cooking oil embargo, sparking fears of a renewed trade conflict between the world’s two largest economies.

The renewed rhetoric stressed the fragile nature of U.S. China relations, which continue to drive volatility across global markets.

“Volatility remains elevated, and the best explanation is the strained relationship between the U.S. and China,” noted veteran investor Louis Navellier in a report published Wednesday.

Despite the geopolitical uncertainty, Asian equities traded broadly higher. Japan’s Nikkei 225 index climbed 0.98%, while the Topix gained 0.75%. In South Korea, the Kospi advanced 0.8%, and the Kosdaq rose 0.83%.

Australia’s S&P/ASX 200 was up 0.93%, while Hong Kong’s Hang Seng Index added 0.77%. On the mainland, however, the CSI 300 remained largely flat, showing cautious investor sentiment amid weak domestic data.

Economic indicators from China offered a mixed picture of the country’s recovery. The Consumer Price Index (CPI) fell 0.3% year-on-year in September, a sharper decline than economists’ expectations for a 0.2% drop, though slightly easing from August’s 0.4% contraction.

On a monthly basis, prices inched up 0.1%, missing forecasts for a 0.2% increase. Meanwhile, deflation in producer prices persisted, stressing continued weakness in business demand and the lingering effects of sluggish domestic consumption coupled with trade related uncertainty.

In the United States, Wall Street ended mixed after a turbulent trading session. The S&P 500 slipped 0.2% to close at 6,644.31, after swinging between a 1.5% loss and a 0.4% gain during the day.

The Nasdaq Composite declined 0.8% to 22,521.70, while the Dow Jones Industrial Average gained 0.4%, or 202.88 points, to finish at 46,270.46.

Adding to the market narrative, Federal Reserve Chair Jerome Powell indicated that the central bank is nearing the end of its balance sheet reduction process and signaled that further interest rate cuts could be on the horizon.

His remarks offered some reassurance to investors concerned about tightening financial conditions but did little to offset concerns over geopolitical and economic headwinds.

Copyright Mettis Link News