Shares were mostly higher Tuesday in Asia after U.S. stock indexes drifted closer to records, while oil prices extended gains.
The futures for the S&P 500 and the Dow Jones Industrial Average fell 0.3%.
Markets in China advanced despite a report showing manufacturing activity slowed in May, even after China and the U.S. paused tariff hikes to allow time for talks.
In early European trading, Germany's DAX climbed 0.3% to 23,996.47, while the CAC 40 in Paris edged 0.2% higher to 7,747.72. Britain's FTSE 100 was up less than 0.1% at 8,779.65.
Adding to uncertainty in a region already enduring war in Ukraine, Poland elected Karol Nawrocki, a conservative historian and staunch nationalist, as its next president in a closely watched vote that signaled a resurgence of right-wing populism in the heart of Europe.
Nawrocki has voiced support for Ukraine’s defense against Russian aggression, but does not back Ukrainian membership in NATO and has questioned the long-term costs of aid — particularly support for refugees.
The survey of Chinese purchasing managers, or PMI, by the financial media group Caixin showed factory output, new export orders, purchasing activity and staffing all declined last month. Incoming new work contracted at the quickest pace in over two-and-a-half years. the report said.
The situation is “a body blow to the backbone of China’s economy: small and mid-sized exporters now caught in a brutal vice grip between faltering global demand and a Washington-led tariff regime that’s more carrot-and-stick diplomacy than ceasefire,” Stephen Innes of SPI Asset Management said in a commentary.
However, as is often the case, investors shrugged off the bad news with the assumption that it might raise the likelihood of more market support from Beijing.
Hong Kong's Hang Seng jumped 1.5% to 23,501.55, while the Shanghai Composite index rose 0.4% to 3,361.98.
Tokyo's Nikkei 225 edged 0.1% lower to 37,446.81.
In Australia, the S&P/ASX 200 climbed 0.6% to 8,466.70. In Taiwan, the Taiex gained 0.6%, while India’s Sensex lost 0.5%.
Beijing and Washington dialed back trade friction slightly as the U.S. extended exemptions for tariffs on some Chinese goods, including solar manufacturing equipment, that U.S. industries rely on for their own production.
The U.S. Trade Representative extended those exemptions, which were due to expire on May 31, by three months through Aug. 31.
The U.S. side said President Donald Trump was expecting to speak with Chinese leader Xi Jinping this week. A Chinese foreign ministry spokesperson said Tuesday that they had no information on that.
Just a few weeks ago, the United States and China agreed to pause many tariff hikes that had threatened to drag the economy into a recession.
China criticized the U.S. on Monday over moves it says has harmed Chinese interests, including issuing AI chip export control guidelines, stopping the sale of chip design software to China, and planning to revoke Chinese student visas.
South Korean markets were closed for a snap presidential election triggered by the ouster of Yoon Suk Yeol, a conservative who now faces an explosive trial on rebellion charges over his short-lived imposition of martial law in December.
On Monday, U.S. stock indexes drifted closer to their records following a stellar May, Wall Street’s best month since 2023.
The S&P 500 rose 0.4% and the Dow industrials added 0.1%. The Nasdaq composite climbed 0.7%.
Trump has been warning that U.S. businesses and households could feel some pain as he tries to use tariffs to bring more manufacturing jobs back to the country, and their on-and-off rollout has created lots of uncertainty.
In other dealings early Tuesday, U.S. benchmark crude oil was up 27 cents at $62.79 per barrel. Brent crude, the international standard, picked up 18 cents to $64.81 per barrel.
The U.S. dollar was unchanged at 142.71 yen. The euro slipped to $1.1430 from $1.1443.
The yield on the 10-year Treasury fell to 4.42% from climbed to 4.44% late Monday.
Worries remain over how much debt the U.S. government will pile on due to plans to cut taxes and increase the deficit.