HONG KONG — Asian markets faced heavy losses on Tuesday as growing concerns over a possible recession in the United States sent shockwaves through global financial markets. The sell-off came after US President Donald Trump refused to rule out the prospect of an economic downturn, adding to investor anxiety. The uncertainty was further compounded by the administration’s latest trade measures, which saw tariffs on Chinese imports double and Beijing’s swift retaliatory actions exacerbate fears of a prolonged economic conflict.
The fallout was immediate, with stocks across the Asia-Pacific region tumbling sharply. The MSCI Asia-Pacific Index, excluding Japan, slid more than 1% as investors rushed to minimize risk exposure. Japan’s Nikkei 225 index dropped nearly 3% in early trading before staging a partial recovery later in the session. South Korea’s KOSPI index saw a steep decline of 2.5%, while Taiwan’s TAIEX fell by nearly 3%. Australia’s S&P/ASX 200 shed as much as 1.7%, while Hong Kong’s Hang Seng Index recorded a more modest decline of less than 1%.
Technology stocks were among the hardest hit, with market giants experiencing substantial losses. In Japan, Sony and Hitachi both tumbled by more than 4.5%, while SoftBank saw its stock price sink by 4.4%. In Taiwan, TSMC and Foxconn each lost more than 3% of their market value. Samsung Electronics, South Korea’s leading technology company, fell by more than 2%, reflecting the widespread sell-off in the semiconductor sector.
The market reaction was driven largely by concerns over Trump’s economic policies, which have continued to disrupt global trade relations. Since his re-election, Trump has doubled down on his protectionist stance, imposing extensive tariffs on imports from Canada, Mexico, and China. His latest move—raising tariffs on all Chinese imports from 10% to 20%—prompted an immediate response from Beijing, which retaliated by imposing tariffs on US agricultural exports. These new measures, which took effect on Monday, have heightened fears that the trade conflict will drag on indefinitely, undermining economic stability.
Wall Street’s reaction to the growing uncertainty was swift, with major US stock indices experiencing significant declines on Monday. The Nasdaq Composite suffered its worst single-day drop since September 2022, plunging 4% as technology stocks led the rout. The Dow Jones Industrial Average lost 890 points, or 2.08%, while the S&P 500 fell 2.7%, wiping out all gains made since Trump’s re-election.
Adding to the bleak outlook, Delta Air Lines cut its earnings forecast on Monday, warning that economic uncertainty was weighing on both consumer and corporate confidence. The airline’s statement further fueled speculation that the US economy might be on the verge of a downturn.
As markets remain gripped by uncertainty, investors continue to monitor economic developments closely, with fears of recession and escalating trade tensions driving volatility across global financial markets.
