BANGKOK (AP) — Asian markets showed a mixed performance on Monday following a significant decline in U.S. stocks amid concerns about a weakening economy affected by uncertainties surrounding President Donald Trump’s policies. Tokyo markets were closed for a holiday.
Hong Kong’s Hang Seng index dropped by 0.6% to 23,348.82, while the Shanghai Composite index slipped by 0.1% to 3,375.29. In Australia, the S&P/ASX 200 saw a marginal increase to 8,300.80. South Korea’s Kospi fell by 0.7% to 2,636.55, and Taiwan’s Taiex declined by 0.6%. India’s Sensex was down by 0.9%.
On Friday, the S&P 500 experienced its worst day in two months, plummeting by 1.7% to close at 6,013.13, following several disappointing reports on the U.S. economy. The Dow Jones Industrial Average lost 748 points, or 1.7%, to 43,428.02, while the Nasdaq composite dropped by 2.2% to 19,524.01.
According to a report from S&P Global, U.S. business activity is showing signs of slowing down, approaching a 17-month low as some services businesses unexpectedly reported contraction. Many respondents in the survey expressed concerns about the future outlook, attributing it to various factors including federal government policies, tariffs, and geopolitical uncertainties.
“We have considered the impact of rising U.S. tariffs and related measures in our forecasts since December 2024, with trade tensions primarily contributing to the projected deceleration in global real GDP growth rates this year. Weakness in investment poses a significant downside risk,” stated Ken Wattret, a global economist at S&P Global.
Another report indicated that U.S. consumers are anticipating higher inflation, partly due to potential tariffs leading to increased import prices. A survey by the University of Michigan showed that consumers expect prices to rise by 4.3% in the next 12 months, up from their forecast of 3.3% inflation the previous month.
The housing market also reflected weakness, with sales of existing homes falling below economists’ expectations last month. Factors such as high mortgage rates and elevated home prices have been impacting sales negatively.
Amidst the market turbulence, small-cap stocks were hit harder than larger companies, with the Russell 2000 index experiencing a notable decline.
Prior to Friday’s significant drop, the S&P 500 had been relatively stable throughout the week, buoyed by better-than-expected earnings reports. However, concerns linger over persistent inflation levels, which could impede further monetary policy actions by the Federal Reserve in supporting the economy and financial markets through interest rate adjustments.
The Federal Reserve has decided to keep the interest rate stable after making significant cuts at the end of last year. During their most recent policy meeting in January, Fed officials indicated that they might maintain this stance for the near future due to concerns about the potential impact of President Trump’s proposed tariffs and mass deportations of migrants on inflation. While reducing rates can stimulate economic growth, it can also lead to increased spending that contributes to inflationary pressures.
In other news from early Monday, the price of U.S. benchmark crude oil dropped by 21 cents to $70.19 per barrel in electronic trading on the New York Mercantile Exchange. Similarly, Brent crude, the global standard, also decreased by 17 cents to $73.88 per barrel. On the currency front, the U.S. dollar strengthened against the Japanese yen, rising to 149.28 yen from 149.24 yen. Additionally, the euro saw an increase, climbing to $1.0512 from $1.0462.
