Investing.com-- Asian stocks had a mixed start to the week, with most indices retreating after fresh tariff announcements from U.S. President Donald Trump, while Chinese shares extended their rally on optimism around AI and fresh stimulus hopes following weak inflation data.

U.S. stock index futures were higher in Asia hours on Monday.

Asia mining stocks drop after Trump tariffs on steel, aluminum imports

Most Asian stock markets were under pressure after Trump announced new 25% tariffs on all steel and aluminum imports. 

This move has heightened concerns over escalating trade tensions and their potential impact on the global economy.

China’s retaliatory tariffs on U.S. goods are set to take effect later in the day, and is further contributing to a subdued sentiment.

South Korea’s KOSPI ticked 0.1% lower, but major steel producers experienced notable declines. 

POSCO (NYSE:PKX) Holdings (KS:005490) shares dropped nearly 2%, while Hyundai Steel (KS:004020) stock saw a 2.5% fall.

Japan’s Nikkei 225 edged 0.2% lower, while TOPIX fell 0.3%. Nippon Steel Corp (TYO:5401) shares were 1.5% lower, while Uacj Corp (TYO:5741) fell more than 1%

Australia's S&P/ASX 200 index fell 0.4%, with the mining sub-index S&P/ASX 300 Metals & Mining dropping nealy 1%.

Indonesia's Jakarta Stock Exchange Composite Index index slumped 2%, while India's Nifty 50 opened 0.4% lower.

China AI stocks extend bullish run, markets assess Jan CPI

Despite the escalating trade war between the world’s two biggest economies, China's AI sector, led by companies like DeepSeek, has demonstrated resilience, bolstering investor confidence.

China’s Shanghai Composite rose 0.4% on Monday, while the Shanghai Shenzhen CSI 300 index was largely unchanged. Hong Kong’s Hang Seng index jumped 1.5%. 

Hong Kong-listed Chinese AI-related stocks continued their bullish run.

Baidu (NASDAQ:BIDU) Inc (HK:9888) shares gained 3.5%, while Alibaba (NYSE:BABA) Group (HK:9988) stock jumped more than 4%.

Xiaomi (OTC:XIACF) Corp (HK:1810) shares were 1.5% higher after hitting a record high in the previous session.

Meanwhile, investors assessed the January inflation report from China.

The consumer price index (CPI) rose moderately in January, while the producer price index (PPI) saw consistent declines.

This data highlighted persistent weakness in both household spending and industrial activity, key drivers of economic growth.

Markets are closely watching China’s policy response. Weak inflation could prompt Beijing to roll out more stimulus measures, such as interest rate cuts or infrastructure spending, to boost its sluggish economy.