Investor sentiment in Asia-Pacific markets soured on Monday, extending a sell-off amid concerns over a looming global trade war sparked by President Donald Trump’s tariff impositions.
Japan bore the brunt of these fears, as early trading witnessed significant losses. The Nikkei 225 index plummeted by 8%, marking its lowest level in approximately 18 months. Concurrently, the broader Topix index saw an even steeper decline, falling 8.60%. The tumultuous session in Japan briefly halted trading of futures when they hit circuit breaker limits.
South Korea’s market was also affected, with the Kospi index dipping by 4.30% at market open and the smaller-cap Kosdaq declining by 3.50%. Meanwhile, Australia’s ASX 200 experienced a 6% drop at the start of trading.
Stock markets in Thailand is closed for holiday day.
U.S. futures also suffered as investor optimism about potential diplomatic negotiations from the Trump administration to mitigate the tariff implications dwindled. Dow Jones futures dropped 2.57%. Meanwhile, S&P 500 futures fell 3% and Nasdaq futures plunged 4.20%.
This market downturn was primarily triggered by the unexpected magnitude of the newly announced tariff rates, which seemed to disregard conventional economic principles. The situation escalated when China promptly announced a retaliatory 34% tariff on all American goods, opting for immediate action rather than dialogue.
“I don’t want anything to go down, but sometimes you have to take medicine to fix something,” Trump told reporters when asked about the stock market rout.
