Asian stocks rise, Australia close to correction

Asian stocks traded in a tight range after President Donald Trump played down fears of a recession, which helped US stocks stage a late-day recovery after whipsawing all day.

Australian shares fell, with the benchmark S&P/ASX 200 index hovering near a correction, after Trump ruled out an exemption from steel and aluminum tariffs despite a lobbying campaign by Prime Minister Anthony Albanese’s government. Stocks rose in Japan and South Korea.

Contracts for the S&P 500 rose in early trading after Trump said he doesn’t see a US economic recession, downplaying Wall Street’s jitters around his trade war.

Wall Street is growing anxious about tariff policy, sticky inflation and the unknown pace of the Federal Reserve’s interest-rate cuts. Investors will look for clues Wednesday after the consumer price index reading. The VIX gauge of stock volatility is hovering near its highest since August, while a similar measure for Treasuries is at levels not seen since November as market participants remain nervous about US economic growth.

“What Trump has been doing has not been helpful for US equity markets,” said Neil Dutta at Renaissance Macro Research. “For now, I don’t see recession. We’ve never really had a recession from policy uncertainty itself. And, we don’t yet know how markets would respond if Trump’s escalation now results in de-escalation later.”

Trump tried to damp down those concerns.“I don’t see it at all. I think this country’s going to boom,” he said at the White House. He added that markets “are going to go up and they’re going to go down. But you know what, we have to rebuild our country.”The White House also confirmed that 25% tariffs on steel and aluminum would take effect on Canada and other nations, as Trump backed off a threat to impose 50% duties on the largest US trading partner’s metals. The S&P 500 ended 9.3% below its all-time high.

Market forecasters at banks including JPMorgan Chase & Co. and RBC Capital Markets have tempered bullish calls for 2025 as Trump’s tariffs stoke fears of slowing economic growth and investors question the lofty valuations of big technology shares. The latest came from Citigroup Inc. strategists, who downgraded their view on US stocks to neutral from overweight.

Chinese stocks will also be closely watched as investors continue to rotate toward the nation’s equities from their US peers. A gauge of Chinese shares listed in Hong Kong is up 20% this year despite the threat of further US tariffs. Talks between the US and China on trade and other issues are stuck at lower levels, with both sides failing to agree on the best way to proceed, according to people familiar with the matter.

Elsewhere, Ukraine accepted a US proposal for a 30-day truce with Russia as part of a deal with the Trump administration to lift its freeze on military aid and intelligence for Kyiv, following eight hours of talks in Saudi Arabia on Tuesday.

Traders will look to the US inflation reading later Wednesday. Economists forecast that US inflation probably stayed elevated last month after a large increase in January, adding to evidence that progress on taming prices has stalled. The consumer price index is seen advancing 0.3% in February after a 0.5% gain at the start of the year.

Markets “will be wary of further signs of sticky prices,” said Kyle Rodda, a senior analyst at Capital.com in Melbourne. “Further evidence of inflation stuck at current levels will raise concerns that the Fed will lack the wiggle room to cut rates if Trump’s economic policies cause a precipitous slowdown in economic growth.”