Asian Shares Mostly Retreat Despite Trump-Xi Trade Truce as Big Tech Spending Worries Weigh

Asian markets opened Friday mostly in the red, a day after U.S. stocks slipped following President Donald Trump's meeting with Chinese leader Xi Jinping. The two men had agreed to extend the truce in the trade war between the world's two largest economies, but the agreement did not lift Chinese markets. They fell on concerns that tensions between Washington and Beijing persist.

Hong Kong's Hang Seng index shed 1.1% to 26,001.60, and the Shanghai Composite slipped 0.8% to 3,954.79. Fresh data added to the gloom: China's official NBS Manufacturing PMI dropped to 49.0 in October from 49.8 in September. Factory activity has now contracted for a seventh straight month, and at the fastest pace in six months.

Japan was the outlier. The Nikkei 225 gained 2.1% to 52,411.34, another record, after a report showed industrial production rose 2.2% month-on-month in September. That beat market expectations and rebounded from a 1.5% drop the month before. South Korea's Kospi rose 0.5% to 4,107.50, while Australia's S&P/ASX 200 gave up earlier gains and shed less than 0.1% to 8,881.90. Taiwan's Taiex fell 0.2% and India's BSE Sensex slipped 0.3%. Indexes in Singapore, Jakarta and Manila were also lower.

On Wall Street Thursday, the S&P 500 fell 1% to 6,822.34, moving further from the all-time high it set Tuesday. The Dow Jones Industrial Average slipped 0.2% to 47,522.12. The Nasdaq composite dropped 1.6% to 23,581.14, pulling back from the record it set the day before.

Trump rated his meeting with Xi a "12" on a scale of zero to 10 and said he would cut tariffs. But stocks had already run to records on hopes for potentially bigger improvements in trade friction, so the outcome offered little new fuel.

Big Tech earnings added pressure, as high expectations met heavy spending plans. Meta Platforms fell 11.3%, trimming a 28.4% gain for the year and becoming the heaviest weight on the S&P 500. Analysts said investors were likely rattled by how much the company said it plans to spend in 2026. Companies across the industry have been on an investment spree to build out artificial-intelligence capabilities, and the worry is whether it will all pay off. Stephen Innes of SPI Asset Management put it sharply in a commentary, describing moments when capital stops behaving like money and starts acting like obsession, with spending becoming the strategy rather than the consequence. In his view, that is where AI is now.

Microsoft sank 2.9% even though its profit and revenue for the latest quarter beat analysts' expectations. Analysts pointed to its expectation of higher investment spending in 2026 than in 2025, and to growth in its Azure business that may have fallen slightly short of some investors' hopes. Alphabet, Google's parent, climbed 2.5% after profit and revenue easily topped forecasts.

The stakes reach well beyond tech investors. Alphabet, Meta and Microsoft together make up 14.5% of the total value of the S&P 500, an index that drives many 401(k) accounts. Moves in those companies and a handful of other Big Tech names can overshadow what hundreds of other stocks are doing.

Elsewhere early Friday, U.S. benchmark crude fell 26 cents to $60.31 a barrel, and Brent lost 27 cents to $64.10. The dollar rose to 154.22 Japanese yen from 154.14, and the euro slipped to $1.1560 from $1.1566. The question now is whether the AI spending pays off, and whether China's factory data turns around.