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Global stocks experienced a significant decline on Friday, following a sharp sell-off in the US market. This was triggered by Donald Trump’s latest threat to impose steep tariffs on imports from major trading partners, raising concerns about the health of the US economy.
The Nikkei 225 index in Japan dropped by 2.9%, while South Korea’s Kospi fell by 3.4%. Hong Kong’s Hang Seng index and mainland China’s CSI 300 benchmark also recorded losses of 3.2% and 1.6% respectively.
European index futures pointed downwards, with contracts for the Euro Stoxx 50 falling by 1.2%.
The US’s S&P 500 lost 1.6% on Thursday, erasing its year-to-date gains and leading to a total decline of 4.2% since the previous Wednesday. The Nasdaq Composite also closed down by 2.8%, with Nvidia experiencing an 8.4% drop despite reporting a significant increase in revenue.
Market analyst Tony Sycamore highlighted concerns about the impact of tariffs on the Asia region and suggested that both the US and China are not yet serious about reaching a deal.
Recent data indicating a decline in US consumer and business sentiment, combined with a lukewarm response to Nvidia’s earnings, have left the market vulnerable to negative macroeconomic news.
Investors are cautious, with retail investors showing unease according to data company VandaTrack. Asian investors have turned to US debt, leading to a decrease in yields on Treasuries.
Cryptocurrencies and gold have also experienced declines, while the dollar has shown some gains against other currencies.
Despite fears of an economic slowdown, some market participants believe that the recent market correction is necessary after a strong performance in 2024.
Chief US economist Steven Blitz remains optimistic, stating that the concerns of a “Trump recession” may be premature.