Asian stocks slid sharply on Tuesday as worries about a global trade war led to concerns about a potential economic slowdown and recession. Investors flocked to safe-haven assets, including the Japanese yen and Swiss franc, in anticipation of a decline in risk sentiment.
US President Donald Trump’s comments on a “period of transition” while declining to predict whether his tariffs would result in a US recession heightened fears among investors. The resulting selloff in US stock futures pushed Asian stocks lower, with Japan’s Nikkei hitting its lowest level since September and Taiwan’s stocks falling to their lowest levels since the same period.
The US S&P 500 fell 2.7% on Monday, its largest one-day drop this year, while the Nasdaq slid 4.0%. The market sell-off has wiped out $4 trillion from the S&P 500’s peak last month. Investors are now pricing in 85 basis points of easing from the Federal Reserve this year, betting weak US growth will compel the central bank to start easing again.
Safe-haven assets, such as gold and oil prices, remained steady despite the market volatility. The yield on US benchmark notes fell 2 basis points on Tuesday, while the two-year note yield reached a five-month low.
Investors are also monitoring Wednesday’s US consumer price index report, which could confirm that inflation is still simmering at levels that force the Federal Reserve to keep monetary policy tighter. Despite this, investors remain cautious due to Trump’s unwavering stance on trade policy, leading some analysts to cut their recommendation for US stocks to “neutral” from “overweight”.
Source: https://www.reuters.com/markets/global-markets-wrapup-1-pix-tv-2025-03-11