Asia markets trade mixed as investors weigh Trump’s ceasefire warning

Asia-Pacific markets traded mixed Tuesday as investors shrugged off fresh doubts over the fragile U.S.-Iran ceasefire after President Donald Trump warned the truce was on “massive life support.”

Trump on Monday cast doubt on the survival of the U.S.-Iran ceasefire, saying the fragile truce was effectively “on life support” after Tehran delivered what he described as an unacceptable response to Washington’s proposal for ending the conflict.

“I would say the ceasefire is on massive life support, where the doctor walks in and says, ‘Sir, your loved one has approximately a 1% chance of living,'” he said.

Japan’s Nikkei 225 added 0.52% at 62,742.57, while the Topix rose 0.83% at 3,872.90. South Korea’s Kospi pared early losses and fell 2.29% at 7,643.15 after notching a fresh record high on Monday. The small-cap Kosdaq fell 2.32% at 1,179.29. In Australia, the S&P/ASX 200 lost 0.36% at 8,670.70.

Yields of Japan’s 10-year government bond hit their highest point since 1997, rising to a high of 2.545% after minutes from the Bank of Japan revealed that some board members said that the BOJ should raise rates soon

Hong Kong Hang Seng index was in choppy trade and fell 0.16% in the last hour of afternoon trade, while the CSI 300 declined 0.08% at 4948.05.

India’s Nifty 50 dropped 1.27%.

Despite mounting geopolitical tensions, higher oil prices and lingering inflation concerns, global equities have continued to push higher, underscoring what GammaRoad Capital Partners’ CIO Jordan Rizzuto describes as a “show me” market, one in which investors are increasingly unwilling to react to risks unless they materially disrupt economic or corporate fundamentals.

After weathering the pandemic, surging inflation, aggressive rate hikes and tariff fears in recent years, investors have become conditioned to buy market weakness rather than retreat from it, he wrote in a note Tuesday.

Rizzuto added that structural factors are also reinforcing the rally, including retail flows into leveraged exchange-traded funds and call options. This has prompted dealers to buy underlying equities as hedges, leading to the rapid expansion of buffer funds and hedged equity strategies that provide additional downside protection.

In the U.S., S&P 500 futures were marginally higher, and Nasdaq 100 futures added 0.1%. Futures tied to the Dow Jones Industrial Average added 24 points, or less than 0.1%.

Overnight in the U.S., the S&P 500 rose, bolstered by key tech stocks even as oil prices rose after Trump rejected Iran’s latest proposal to end the war.

The broad market index gained 0.19% and closed at 7,412.84, while the Nasdaq Composite inched up 0.1% to end at 26,274.13. Both indexes hit fresh all-time intraday highs during the session, and they closed at records. The Dow Jones Industrial Average advanced 95.31 points, or 0.19%, to 49,704.47.

— CNBC’s Lim Hui Jie and Lisa Kailai Han contributed to this report.