Asian stocks edged lower on Friday while the U.S. dollar held firm, as investors remained cautious ahead of two key market-moving events: the U.S. jobs report and a potential Supreme Court ruling on the legality of former President Donald Trump’s sweeping global tariffs.
Much of the uncertainty centers on the court decision, which analysts describe as a major wildcard. A ruling against the tariffs could lift market sentiment but may also pressure government revenue and push Treasury yields higher. Even so, investors note that the U.S. administration could seek alternative ways to maintain trade levies.
MSCI’s Asia-Pacific shares outside Japan dipped 0.2%, hovering just below a recent record high. Japan’s Nikkei jumped 1.5%, supported by strong earnings from Fast Retailing, while European stock futures pointed higher. U.S. futures were largely steady after the S&P 500 ended flat on Thursday, with defence stocks continuing to outperform.
Attention now turns to December’s U.S. nonfarm payrolls report, expected to show modest job growth and reinforce the view that the labor market remains in a “no hire, no fire” phase. Markets are pricing in at least two Federal Reserve rate cuts this year, though policymakers have signaled a more cautious outlook.
Meanwhile, geopolitical tensions boosted oil prices toward a two-week high, keeping energy and defence stocks in focus as traders balance economic data with global risk developm
Frequently Asked Questions
Why did Asian markets trade lower?
Asian stocks slipped as investors stayed cautious ahead of the U.S. jobs report and a possible Supreme Court ruling on U.S. tariffs, both of which could trigger market volatility.
Why is the Supreme Court tariff ruling important for markets?
A decision against the tariffs could affect U.S. government revenue, Treasury yields, and global trade sentiment, potentially causing sharp moves across equities, currencies, and bonds.
What is the market expecting from the U.S. jobs report?
Economists expect modest job growth, reinforcing the view that the labor market is stable but sluggish, often described as a “no hire, no fire” environment.
How are central bank expectations influencing markets?
Traders are pricing in at least two U.S. Federal Reserve rate cuts this year, although the Fed has signaled it may cut rates only once, adding to uncertainty.
Why are oil and defence stocks rising?
Rising geopolitical tensions and concerns over global supply disruptions have pushed oil prices higher and boosted demand for defence-related stocks.
