Stocks in Asia fell on Thursday for the first time in five sessions as the rally on Wall Street sparked by US-China trade talks showed signs of exhaustion.

Japanese and Australian stocks slipped, along with US futures, while mainland Chinese and Hong Kong stocks edged lower. The moves reflected a note of caution in a week marked by a sharp rebound in risk assets fueled by progress in trade talks and economic resilience. Lurking in the background is the worry that stocks get so extended that they’re vulnerable to surprises.

“As trade tensions ease, investors are pivoting back to fundamentals, but they may not like what they see,” said Mark Hackett at Nationwide. “The market has raced from oversold to overbought in record time. That limits near-term upside unless we see a clear re-acceleration in growth.”

Still, the nascent US-China trade truce, a UK pact and high-profile Gulf deals have been reassuring investors. The S&P 500 rose 0.1% overnight, while the Nasdaq 100 gained 0.5%, helped along by an advance for Nvidia Corp that wiped 2025 losses for the chipmaker.

An index of the dollar fell Thursday, retracing a Wednesday rally. 

In further signs of thawing trade tensions, China on Wednesday suspended curbs on exports of rare earths and other goods and technologies for military use. The move followed an agreement by the Asian nation and the US to temporarily lower tariffs levied against each other’s products and will last for 90 days, China’s Ministry of Commerce said in a statement.

Elsewhere, traders will be watching for further moves in the won after a report that the US and South Korean governments discussed currency policies this month. The won extended gains on Thursday while neighboring currencies, including the Japanese yen, also rose. 

Interest-Rate Bets

Selling in US government debt across the curve on Wednesday sent the 10-year yield to around the highest in a month, as Federal Reserve rate-cut bets receded. Yields were steady during Asian trading on Thursday.

Fed Bank of Chicago President Austan Goolsbee said that it’s important for central bankers not to respond to day-to-day volatility in equities and economic policy pronouncements, noting that economic data remain steady for now. Fed Vice Chair Philip Jefferson said tariffs and related uncertainty could slow growth and boost inflation this year, but monetary policy is well positioned to respond as needed.

“Fed vice chair Jefferson’s speech today leans a little dovish after a run of more hawkish commentary from Fed officials, signaling that the Fed leadership is (sensibly) wary of calling the all-clear on downside risk even after US-China de-escalation,” said Krishna Guha at Evercore.

The modest advance for US stocks on Wednesday covered up a broadly down day for most sectors. Big tech was the key exception, alongside a mix of individual names. Boeing Co. rallied on its largest-ever deal after Qatar Airways placed an order for long-range jets during a visit to Doha by Donald Trump. 

To Rick Gardner at RGA Investments, the stock-market rally has legs.

“The trade negotiation with China was seemingly the toughest one on the docket, and the idea that there has been this much progress on the negotiations over such a short period of time, suggests that a resolution may be on the horizon,” he said.

Gold climbed after falling 2.3% to a one-month low in its previous session. Oil dropped for a second day after a government report showed US crude inventories rose the most in two months.

Some of the main moves in markets:

Stocks

  • S&P 500 futures fell 0.2% as of 10:28 a.m. Tokyo time

  • Nikkei 225 futures (OSE) fell 1%

  • Japan’s Topix fell 0.9%

  • Australia’s S&P/ASX 200 was little changed

  • Hong Kong’s Hang Seng was little changed

  • The Shanghai Composite fell 0.2%

  • Euro Stoxx 50 futures were little changed

Currencies

  • The Bloomberg Dollar Spot Index fell 0.2%

  • The euro rose 0.2% to $1.1197

  • The Japanese yen rose 0.4% to 146.15 per dollar

  • The offshore yuan was little changed at 7.2077 per dollar

  • The Australian dollar rose 0.2% to $0.6441

Cryptocurrencies

  • Bitcoin was little changed at $103,497.07

  • Ether rose 0.6% to $2,615.6

Bonds

  • The yield on 10-year Treasuries was little changed at 4.53%

  • Japan’s 10-year yield advanced two basis points to 1.470%

  • Australia’s 10-year yield advanced eight basis points to 4.55%

Commodities

  • West Texas Intermediate crude fell 1.7% to $62.05 a barrel

  • Spot gold rose 0.3% to $3,186.24 an ounce

. Read more on Markets by NDTV Profit.An index of the dollar fell Thursday, retracing a Wednesday rally.  Read MoreMarkets, Business, Bloomberg 

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