Recession worries, trade wars leave markets in turmoil
A person looks at an electronic stock board showing Japan's Nikkei index at a securities firm Wednesday, Feb. 26, 2025, in Tokyo.
Asian benchmarks dove on Tuesday, as worries grew about the ripple effects from President Donald Trump's tariffs on regional economies and companies.
Traders had initially welcomed his election on optimism that his promised tax cuts and deregulation would boost the world's top economy and help equities push to more record highs.
But there is now a growing pessimism that a recession could be on the cards amid warnings that tariffs imposed on key trade partners will reignite inflation and force the Federal Reserve to hike interest rates again.
The president's weekend comments that the economy was facing "a period of transition" and his refusal to rule out a downturn did little to soothe investor worries.
A new wave of tariffs due this week will see steep levies of 25 percent on steel and aluminum imports.
Uncertainty over Trump's tariffs and threats have left U.S. financial markets in turmoil and consumers unsure of what the year might bring.
Tokyo was among the main losers.
Hong Kong and Shanghai extended March 10’s selling. Sydney, Singapore, Seoul, Taipei, Wellington and Manila were also deep in negative territory.
"Economic uncertainty and recession fears have intensified, partly driven by Trump's weekend comments about the economy being in "a period of transition" and his reluctance to rule out a recession," said Shaun Murison, senior market analyst at IG online trading platform.
"This uncertainty has heightened investor anxiety. Trump's trade policies, including ongoing tariff discussions are creating uncertainty and fears of economic slowdown,” he said.
"These tariffs could potentially elevate prices and complicate efforts to reduce interest rates," Murison added.
