Dow Jones and Nasdaq 100 May Surrender Gains Despite Positive China PMI Figures

Key Points:

• China’s PMI climbed to 50.5 in August, lifting the Hang Seng by 2.16% as sentiment improved despite ongoing tariff concerns.

• U.S. court rules Trump’s tariffs unlawful, though an appeal is expected; investors weigh trade implications for the U.S. economy.

• Fed’s rate outlook depends on U.S. Jobs Report; higher unemployment could boost rate cut expectations but raise stagflation risks.

Asian Market Highlights: Hang Seng Surges on Strong China Data
Fresh economic data from China boosted investor sentiment, easing worries that U.S. tariffs would push the economy toward a slowdown. The RatingDog China General Manufacturing PMI unexpectedly rose to 50.5 in August from 49.5 in July, beating forecasts for no change.

Stronger new orders and a slower decline in external demand drove manufacturing activity above the critical 50.0 threshold. In response, the Hang Seng Index gained 2.16% to 25,619 in Monday morning trade (September 1). Mainland equities also advanced, with the CSI 300 up 0.30% and the Shanghai Composite rising 0.46%.

Elsewhere, uncertainty surrounding U.S. tariffs and investor caution ahead of the closely watched U.S. Jobs Report (September 5) weighed on broader Asian markets.

On August 29, the U.S. Court of Appeals declared President Trump’s tariffs illegal. The ruling was issued shortly after U.S. markets closed for the Labor Day weekend. However, the court permitted the administration to maintain tariffs while a potential Supreme Court appeal is considered.

President Trump rejected the decision, calling it wrong, and warned that removing tariffs would be “a total disaster for the country.” A Supreme Court reversal could reinstate his authority to impose tariffs freely.

Meanwhile, Japan’s Nikkei 225 fell 2.03% in morning trade, while Australia’s ASX 200 declined 0.58%.