Stock market today: Asian shares mostly fall on worries about Trump’s tariffs

TOKYO — Asian shares fell on Tuesday mainly as concerns spread Newly elected President Donald Trump’s comment that he plans to impose sweeping new tariffs over Mexico, Canada and China once he comes to power.

Japan’s benchmark Nikkei 225 fell 1.2% to 38,305.20 and Australia’s S&The P/ASX 200 lost 0.4% to 8,384.80. South Korea’s Kospi fell 0.6% to 2,518.58. Hong Kong’s Hang Seng rose 0.4% to 19,223.94, while the Shanghai Composite gained 0.4% to 3,277.82.

Stocks rose on Wall Street on Monday, with companies likely to benefit most from lower interest rates and a stronger economy leading the charge. The S&The P500 climbed 0.3% to 5,987.37, moving closer to its all-time high reached two weeks ago. The Dow Jones Industrial Average added 1% to its own record on Friday, closing at 44,736.57, while the Nasdaq index rose 0.3% to 19,054.84.

Treasury yields fell in what some analysts called a ‘Bessent bounce’ after Trump said he wanted Scott Bessenta hedge fund manager, to become his treasury secretary.

Bessent has advocated reducing the U.S. government’s budget deficit, which is how much more the U.S. government spends than it brings in through taxes and other revenues. Such an approach could mitigate concerns on Wall Street that Trump’s policies could lead to a much larger deficit, which would in turn put upward pressure on government bond yields and drive down prices.

After rising above 4.44% immediately after Trump’s election, the yield on the 10-year Treasury fell back to 4.26% on Monday, down from 4.41% at the end of Friday. That is a remarkable move, and the lower interest rates make it cheaper for all kinds of companies and households to borrow money. They also boost prices for stocks and other investments.

The Russell 2000 index of smaller stocks rose 1.5%. It finished just below the all-time high reached three years ago. Smaller companies may see a bigger boost from lower financing costs, as many companies need to borrow to grow.

Two-year Treasury yields, which are more in line with market expectations about what the Federal Reserve will do with overnight interest rates, also fell sharply.

The Fed started lowering the main interest rate just a few months ago from a two-decade high, hoping the The labor market is buzzing after delivery inflation almost completely down to the 2% target. But immediately after Trump’s victory, traders had lowered their bets on how many cuts the Fed could make next year. They worried that Trump’s preference for lower tax rates and higher spending on the border would increase the national debt.

A report due Wednesday could influence how much the Fed will cut rates. Economists expect this will show that an underlying inflation trend favored by the Fed accelerated to 2.8% last month, up from 2.7% in September. Higher inflation would make the Fed more reluctant to cut rates as deeply or as quickly as it would otherwise.

On the stock market, Bath & Body works rose 16.5% after reporting stronger earnings for the latest quarter than analysts expected. The seller of personal care products and home fragrances also raised its full-year financial guidance.

Much has been made of how resilient American shoppers can remain given high prices across the economy and still-high interest rates.

Another major retailer, Macy’s, said Monday that sales for the latest quarter were in line with expectations, but that the release of full financial results will be delayed. It found one a single employee deliberately concealed up to $154 million in delivery fees, and it needs more time to complete its investigation. Macy’s shares fell 2.2%.

In other trades early Tuesday, U.S. benchmark crude added 23 cents to $69.17 a barrel. Brent crude, the international standard, added 19 cents to $72.67 a barrel.

In currency trading, the US dollar fell from 154.11 yen to 153.82 Japanese yen. The euro cost $1.0462, up from $1.0499.

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AP Business Writer Stan Choe contributed.