Asian stock markets suffered sharp declines on Monday, following significant losses in U.S. futures as concerns over President Donald Trump’s recent tariff hikes sparked fears of a global trade war. Oil prices also dropped, with U.S. benchmark crude falling by 4%.
Japan’s Nikkei 225 plunged nearly 8% shortly after opening, while Australia’s S&P/ASX 200 fell over 6%. South Korea’s Kospi also dropped by 4.4%. These developments followed Wall Street’s dramatic sell-off on Friday, triggered by Trump’s tariffs and China’s retaliatory measures, which heightened worries about a potential global economic downturn. Stocks of U.S. companies with business ties to China experienced some of the steepest losses.
U.S. futures markets indicated further weakness ahead, with the S&P 500 futures down 4.2%, Dow Jones Industrial Average futures shedding 3.5%, and Nasdaq futures losing 5.3%.
Oil prices continued their downward trend, with U.S. benchmark crude dropping $2.50 to $59.49 per barrel, while Brent crude fell $2.25 to $63.33 per barrel. These figures marked the lowest crude oil prices since 2021.
Also read: Donald Trump Defends Tariffs On Chinese Goods, US Tariffs On Chinese Imports Now 54%
Friday’s Market Collapse
Wall Street faced its worst crisis since the COVID-19 pandemic on Friday, with the Dow Jones Industrial Average entering correction territory for the first time since March 2022, according to CNN reports. The S&P 500 fell by 6%, while the Dow dropped by 2,231 points (5.5%). The Nasdaq Composite also declined by 5.82%.
China’s response to Trump’s tariffs accelerated global market losses. Beijing announced a matching tariff of 34% on imports from the U.S., effective April 10, alongside other measures targeting American goods. The escalating trade war between the world’s two largest economies has raised fears of a recession that could impact global markets significantly.
Even a stronger-than-expected U.S. jobs report failed to offset the market downturn, underscoring the severity of investor concerns over trade tensions.
Trump Defends Tariffs
President Trump addressed the sell-off, stating that while he did not want global markets to decline, his tariffs were necessary for economic correction. “Sometimes you have to take medicine to fix something,” he remarked on Sunday, adding that he had spoken to leaders worldwide about reducing trade deficits with their countries.
Federal Reserve Chair Jerome Powell warned that tariffs could fuel inflation expectations and increase price levels further. Powell emphasized the importance of preventing short-term price hikes from evolving into long-term inflation issues.