Asian benchmarks dove Tuesday, as worries grew about the ripple effects from President Donald Trump’s tariffs on regional economies and companies.
Japan’s benchmark Nikkei 225 dove 1.7% in morning trading to 36,382.57. Australia’s S&P/ASX 200 lost 0.9% to 7,888.50. South Korea’s Kospi declined 1.5% to 2,532.29. Hong Kong’s Hang Seng slipped 0.9% to 23,568.83, while the Shanghai Composite lost 0.4% to 3,352.01.
“Heightened anxiety surrounds both existing and incoming U.S. tariffs, along with retaliatory measures from trading partners, and China’s newly effective tariffs will continue to weigh on equities,” said Anderson Alves, a trader at ActivTrades.
Also Tuesday, Japan slightly lowered its October-December economic growth rate to an annual rate of 2.2%, revised from the 2.8% growth given last month, because of revisions in consumer spending and private inventories.
The stock fall in Asia echoed the sell-off on Wall Street, where investors are raising questions on how much pain Trump will let the economy endure through tariffs and other policies in order to get what he wants.
The S&P 500 dropped 2.7% to drag it close to 9% below its all-time high, which was set just last month. At one point, the S&P 500 was down 3.6% and on track for its worst day since 2022. That’s when the highest inflation in generations was shredding budgets and raising worries about a possible recession that ultimately never came.
The Dow Jones Industrial Average dropped 890 points, or 2.1%, after paring an earlier loss of more than 1,100, while the Nasdaq composite skidded by 4%.
It was the worst day yet in a scary stretch where the S&P 500 has swung more than 1%, up or down, seven times in eight days because of Trump’s on -and- off -again tariffs. The worry is that the whipsaw moves will either hurt the economy directly or create enough uncertainty to drive U.S. companies and consumers into an economy-freezing paralysis.
The economy has already given some signals of weakening, mostly through surveys showing increased pessimism. And a widely followed collection of real-time indicators compiled by the Federal Reserve Bank of Atlanta suggests the U.S. economy may already be shrinking.
Asked over the weekend whether he was expecting a recession in 2025, Trump told Fox News Channel: “I hate to predict things like that. There is a period of transition because what we’re doing is very big. We’re bringing wealth back to America. That’s a big thing.” He then added, “It takes a little time. It takes a little time.”
Trump says he wants to bring manufacturing jobs back to the United States, among other reasons he’s given for tariffs. His Treasury secretary, Scott Bessent, has also said the economy may go through a “detox” period as it weans off an addiction to spending by the government. The White House is trying to limit federal spending, while also cutting the federal workforce and increasing deportations, which could hinder the job market.
The U.S. job market is still showing stable hiring at the moment, to be sure, and the economy ended last year running at a solid rate. But economists are marking down their forecasts for how the economy will perform this year.
In response to the market sell-off, White House spokesman Kush Desai noted that a number of companies have responded to Trump’s “America First” economic agenda with “trillions in investment commitments that will create thousands of jobs.”
Trump met on Monday with tech industry CEOs, but the event was closed to the news media.
The worries hitting Wall Street have so far been hurting some of its biggest stars the most. Big Tech stocks and companies that rode the artificial-intelligence frenzy in recent years have slumped sharply.
Nvidia fell another 5.1% Monday to bring its loss for the year so far to more than 20%. It’s a steep drop-off from its nearly 820% surge over 2023 and 2024.
Elon Musk’s Tesla fell 15.4% to deepen its loss for 2025 to 45%. After getting an initial post-election bump on hopes that Musk’s close relationship with Trump would help the electric-vehicle company, the stock has slumped on worries that its brand has become intertwined with Musk. Protests against the U.S. government’s efforts to cull its workforce and other moves have targeted Tesla dealerships, for example.
Instead, investors have bid up U.S. Treasury bonds as they look for things whose prices can hold up better when the economy is under pressure. That has sent prices for Treasurys sharply higher, which in turn has sent down their yields.
The yield on the 10-year Treasury tumbled again to 4.22% from 4.32% late Friday. It’s been dropping since January, when it was approaching 4.80%, as worries about the economy have grown. That’s a major move for the bond market.
All told, the S&P 500 fell 155.64 points to 5,614.56. The Dow Jones Industrial Average dropped 890.01 to 41,911.71, and the Nasdaq composite sank 727.90 to 17,468.32.
In energy trading, benchmark U.S. crude slipped 17 cents to $65.86 a barrel. Brent crude, the international standard, fell 9 cents to $69.19 a barrel.
In currency trading, the U.S. dollar fell to 146.92 Japanese yen from 147.14 yen. The euro cost $1.0858, up from $1.0839.
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AP Business Writer Stan Choe contributed.
