Asian stocks followed Wall Street’s lead and experienced significant declines on Tuesday, fueled by concerns over a potential trade war impacting U.S. economic growth and triggering a recession. Investors sought refuge in the safe-haven Japanese yen amidst uncertainty stemming from President Trump’s comments about a transitional period and the impact of tariffs on the economy. This sentiment led to a sell-off in stocks, weakening the U.S. dollar and Treasury yields.
The S&P 500 and Nasdaq suffered substantial losses, with futures continuing to decline in Asian trading hours. Across Asia, markets were painted red, with Japan’s Nikkei and Taiwan stocks hitting their lowest levels in months. Even Chinese and Hong Kong stocks, previously strong performers, succumbed to the negative sentiment.
European futures hinted at a lower open, setting the stage for further declines. Analysts suggested that the market was adjusting to the administration’s aggressive stance on tariffs, anticipating potential disinflation and lower yields. Safe-haven assets like the yen and Swiss franc saw increased demand, while the dollar index hovered near a four-month low.
Amidst fears of a global economic slowdown, oil prices fell for a second day as concerns about reduced energy demand loomed due to trade uncertainties and increased supply from OPEC+. Brent and West Texas Intermediate crude futures dipped as markets braced for continued volatility.
Edited by Lincoln Feast.
