Asian markets declined on Tuesday after a sharp drop in U.S. stocks, driven by concerns over the economic impact of President Donald Trump’s latest round of tariffs, reports AP.
A 25% tariff on imports from Canada and Mexico took effect early Tuesday, while an additional 10% tariff was imposed on Chinese goods. In response, Beijing signalled through state media that it was considering retaliatory measures, potentially targeting U.S. agricultural exports such as soybeans.
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Japan’s Nikkei 225 fell 1.9% to 37,084.83, while Hong Kong’s Hang Seng index dropped 1.6% to 22,666.68. China’s Shanghai Composite slipped 0.2% to 3,310.35. In South Korea, the Kospi saw a slight gain of less than 0.1% to 2,533.77, while Taiwan’s Taiex declined 0.9%. Most Southeast Asian markets also registered losses.
On Monday, the S&P 500 fell 1.8% to 5,849.72 after Trump declared there was “no room left” for negotiations to lower the tariffs, which he had previously delayed for further discussions. The Dow Jones Industrial Average declined 1.5% to 43,191.24, while the Nasdaq composite dropped 2.6% to 18,350.19.
Wall Street had hoped for a less severe trade stance, and Trump’s decision came amid growing concerns about the U.S. economy. Monday’s losses trimmed the S&P 500’s post-Election Day gains to just over 1%, down from a peak of more than 6%, as the initial optimism surrounding Trump’s economic policies faded.
After the S&P 500 reached a record high last month, driven by stronger-than-expected corporate earnings, sentiment turned negative following weaker economic reports. Recent data showed declining consumer confidence in the face of inflation concerns linked to tariffs.
Another economic report on Monday revealed that while U.S. manufacturing activity continued to expand, it did so at a slower pace than expected. More worryingly, new orders contracted while prices rose, sparking concerns over who would bear the costs of Trump’s tariffs.
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Following the report, the yield on the 10-year Treasury note fell to 4.16% from 4.24%, continuing its decline from January’s high of nearly 4.80%, reflecting fears of an economic slowdown.
Tech stocks, particularly Nvidia and other high-growth companies, bore the brunt of the market downturn. Nvidia plunged 8.8%, while Tesla lost 2.8%.
Elsewhere, grocery giant Kroger fell 3% after CEO Rodney McMullen resigned following an internal investigation into his personal conduct.
Cryptocurrency-linked stocks also retreated despite an initial rally spurred by Trump’s announcement over the weekend about a strategic crypto reserve. MicroStrategy, which has been investing heavily in bitcoin, ended 1.8% lower, while Coinbase dropped 4.6%.
In Europe, markets surged on Monday following a report indicating a slowdown in inflation for February, boosting expectations of an interest rate cut from the European Central Bank later in the week. Germany’s DAX climbed 2.6%, and France’s CAC 40 rose 1.1%. Despite Trump’s “America First” stance, international markets have outperformed the S&P 500 this year.
In early Tuesday trading, U.S. benchmark crude oil declined 30 cents to $68.07 per barrel, while Brent crude dropped 51 cents to $71.11 per barrel.
The U.S. dollar weakened to 149.29 Japanese yen from 149.50 yen, while the euro edged down to $1.0484 from $1.0488.
Bitcoin tumbled 10.3% to $83,750, according to CoinDesk.