Asian Stocks Inch Higher as Trump’s Visa Crackdown Sparks Market Jitter

Asian stocks posted modest gains but investor sentiment remained cautious as markets reacted to President Trump’s proposed crackdown on H-1B visas. The policy shift, which includes a steep new fee and tighter restrictions, fueled concerns over its impact on the technology sector and global labor mobility. Analysts say the uncertainty is weighing on market confidence, particularly in countries with strong outsourcing ties to the U.S., even as broader regional indexes showed slight upward movement.

Asian stocks rose slightly and the dollar held steady on Monday as investors assessed the U.S. monetary policy outlook following the Federal Reserve’s rate cut last week. Market sentiment, however, was tempered by President Donald Trump’s plan to impose steep new fees on worker visas.

The Trump administration said Friday it would require companies to pay $100,000 annually for each new H-1B visa, a move seen as a direct hit to the technology sector, which depends heavily on skilled labor from India and China. Analysts said the measure could drive up labor costs and force firms to rethink hiring strategies.

“It’s a risk to operating costs and margins first of all. Obviously it could raise wages and labor costs a bit,” said Kyle Rodda, senior financial analyst at Capital.com. “Tech companies may also find themselves in a bind where they confront punitive measures if they look to offshore labor because they can’t find enough workers in the U.S.”

In early trading, U.S. stock futures dipped, with S&P 500 futures off 0.1%. MSCI’s broadest index of Asia-Pacific shares outside Japan edged up 0.09%, while Tokyo’s Nikkei gained 1% after Friday’s losses.

On the macroeconomic front, traders remain focused on the Fed’s next steps. Policymakers signaled last week that additional rate cuts may come gradually, even after lowering rates. Key inflation data, including the Fed’s preferred measure—the core PCE price index—is due Friday. Analysts expect a 0.2% monthly rise, keeping the annual rate at 2.9%, well above the 2.6% low seen in April. Futures markets are pricing in about 44 basis points of cuts by year-end.

The dollar index was steady at 97.716, with analysts divided over its near-term trajectory. “The trajectory of the USD is less clear-cut,” said Chris Weston, head of research at Pepperstone. “With a deluge of Treasury supply and a big lineup of Fed speakers, Treasury yields could drive USD flows.”

In currencies, the yen weakened slightly to 148.20 per dollar after strengthening on Friday, when the Bank of Japan held rates steady but two board members pushed for a hike to 0.75%. Markets read the move as a signal the BOJ is inching toward a more hawkish stance. “Expectations of future rate increases and the potential for higher JGB yields and a stronger yen may not be the best news for Japanese equities and bonds in the short term,” said Vasu Menon, managing director of investment strategy at OCBC Bank.

Commodities were firmer, with Brent crude futures up 0.3% to $66.89 a barrel and U.S. West Texas Intermediate rising 0.35% to $62.90. Gold climbed 0.24% to $3,692.79 per ounce, just below last week’s record high.

India’s $283 billion IT sector, which derives more than half its revenue from the U.S., is expected to feel immediate pressure from the visa changes. Ties between Washington and New Delhi have already been strained, with Trump doubling tariffs on Indian imports to as high as 50% last month, partly in response to India’s continued purchases of Russian oil.

For questions or comments write to contactus@bostonbrandmedia.com

Source: Business Standard

‍