In a day of fluctuating fortunes across Asian stock markets, Tuesday witnessed a mixed performance as investors kept a keen eye on developments from the planned meeting between U.S. President Donald Trump and China’s top leadership. The anticipation stemmed from hopes of progress in trade discussions that could potentially ease the ongoing economic tensions.

Chinese stock markets saw modest gains, with Hong Kong’s Hang Seng index inching up by 0.1% to close at 26,451.08. Meanwhile, the Shanghai Composite Index rose by 0.2%, reaching its highest point in a decade at 4,005.44. These gains came amid speculation that a significant trade agreement might emerge from the upcoming discussions between Trump and Chinese President Xi Jinping, set to take place on the sidelines of an upcoming Pacific Rim summit in South Korea.

Such an agreement could mark a pivotal moment in the ongoing trade dispute that has impacted global markets and created uncertainties for businesses worldwide. Trump’s approach aims to smooth over these tensions, which have been a source of market volatility since his return to the presidency.

In Japan, the benchmark Nikkei 225 saw a slight downturn, dropping 0.2% in early trading to 50,419.96. This dip followed a period of record highs achieved after Sanae Takaichi took office as Japan’s first female prime minister. The recent highs reflected optimism in her leadership and potential policy shifts.

During his visit to Tokyo on Tuesday, President Trump is slated to meet with Prime Minister Takaichi, visit a U.S. military base, and engage with business leaders. These engagements underscore the strong security alliance between the U.S. and Japan, with Japan pledging to meet Trump’s demands for increased investments, a more significant defense role, and higher imports from the U.S., further solidifying bilateral ties.

“So Asia opens not with fireworks, but with an uneasy calm — a market breath half held. Traders aren’t chasing the rumor this time; they’re watching, weighing, waiting for something real to sign,” said Stephen Innes, managing partner at SPI Asset Management.

Australia’s S&P/ASX 200 fell 0.4% to 9,017.80. South Korea’s Kospi shed 1.2% to 3,992.77 after the nation reported relatively strong quarterly economic growth thanks to strong consumption, investments and exports.

On Wall Street, stocks climbed to more records on Monday ahead of a week packed with potentially market-moving events. The S&P 500 rose 1.2% to 6,875.16. The Dow Jones Industrial Average added 0.7% to 47,544.59, and the Nasdaq composite jumped 1.9% to 23,637.46.

The U.S. stock market has been on a record-breaking rally. The S&P 500 has shot up a stunning 38% since hitting a low in April, when worries about Trump’s tariffs on China and other countries were at their peak. Besides hopes for easing trade tensions, the rally has also been built on expectations for several more things to happen.

One is that the Federal Reserve will keep cutting interest rates in order to give the slowing job market a boost. The Fed’s next announcement on interest rates is due on Wednesday, and the nearly unanimous expectation among traders is that it will cut the federal funds rate by a quarter of a percentage point at a second straight meeting.

It’s not a certainty though, because the Fed has also warned it may have to change course if inflation accelerates beyond its still-high level. That’s because low interest rates can make inflation worse.

Besides lower interest rates, another expectation that’s propped up stock prices is the forecast that U.S. companies will continue to deliver solid growth in profits. Some of Wall Street’s most influential stocks are set to report their results this week, including Alphabet, Meta Platforms and Microsoft on Wednesday, and Amazon and Apple on Thursday.

In the bond market, the yield on the 10-year Treasury eased to 3.99% from 4.02% late Friday.

In energy trading, benchmark U.S. crude slipped 3 cents to $61.28 a barrel. Brent crude fell 2 cents to $64.86 a barrel.

In currency trading, the U.S. dollar dropped to 152.41 Japanese yen from 152.88 yen. The euro cost $1.1658, up from $1.1645.

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AP Business Writer Stan Choe contributed.