Asian stocks moved slightly higher on Monday while the dollar held steady, as investors assessed the Federal Reserve’s monetary policy outlook following last week’s rate cut. Market sentiment was also cautious after President Donald Trump announced new restrictions on worker visas.
India’s benchmark index slipped after the Trump administration revealed plans to charge companies $100,000 for new H-1B visas. This policy is seen as a major setback for the technology sector, which heavily relies on skilled workers from India and China.
In the U.S., stock futures edged lower with S&P 500 futures down 0.1%. European futures also pointed to a subdued open. In Asia, MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.1%, while Tokyo’s Nikkei gained 1.3%. Taiwan’s benchmark index advanced more than 1% to reach a record high.
India’s $283 billion IT industry, which earns over half its revenue from the United States, faces rising risks as tensions grow between Washington and New Delhi. Trump recently doubled tariffs on Indian imports to as high as 50%, partly due to India’s oil trade with Russia.
“Visa costs could raise operating expenses and squeeze margins,” said Kyle Rodda, senior analyst at Capital.com. He added that tech companies may also struggle if they are forced to rely on U.S. labor amid punitive restrictions on offshoring.
In China, stock markets traded mixed as investors weighed positive signals from U.S.-China talks. Trump said he and President Xi Jinping had made progress on a potential agreement over TikTok.
Fed Policy Outlook
Attention now turns to the Federal Reserve’s path forward. Investors are pricing in 44 basis points of easing across the two remaining policy meetings this year. Several Fed officials are scheduled to speak this week, while the Fed’s preferred inflation gauge, the core PCE price index, is due on Friday. Analysts expect a 0.2% monthly increase, keeping the annual rate steady at 2.9%.
Despite expectations for further cuts, some analysts warn that dollar short positions are becoming crowded. The dollar index edged 0.09% higher to 97.814 but remains down nearly 10% for the year, with most of the decline occurring in the first half of 2025.
The Japanese yen weakened slightly to 148.20 per dollar after Friday’s gains. The Bank of Japan held rates steady, but two board members voted for a hike, signaling a more hawkish stance. Analysts believe this could raise expectations for future rate increases, which may pressure Japanese equities and bonds in the short term.
Commodities
Oil prices advanced in early trade, with Brent crude up 0.7% at $67.16 a barrel and U.S. West Texas Intermediate rising 0.77% to $63.16. Gold prices climbed 0.24% to $3,692.79 per ounce, just below last week’s record high.
