Asian equities fall in an echo of Wall Street’s sell-off over concerns about Trump’s Tariffs

Asian benchmarks fell Tuesday as concerns intensified over the impact of President Donald Trump’s tariffs on regional economies and industries. Japan’s Nikkei 225 fell 1.7% in early trade to 36,382.57. Australia’s S&P/ASX 200 index fell 0.9% to 7,888.50. 

South Korea’s Kospi fell 1.5 percent to 2,532.29. Hong Kong’s Hang Seng fell 0.9% to 23,568.83, while the Shanghai Composite fell 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,” says Anderson Alves, a trader with ActivTrades. Also, on Tuesday, Japan reduced its October-December GDP growth rate to 2.2%, down from 2.8% the previous month, due to adjustments in consumer spending and private inventories. 

The market drop in Asia mirrored the sell-off on Wall Street, where investors questioned how much pain Trump would cause the economy through tariffs and other measures to accomplish his desired goals. The S&P 500 fell 2.7%, nearly 9% below its all-time high set only last month. At one time, the S&P 500 was down 3.6% and on course for its worst day since 2022. That’s when the most considerable inflation in decades shredded budgets and sparked fears of a severe recession, which never materialized.

The Dow Jones Industrial Average fell 890 points, or 2.1%, after recovering from a previous fall of more than 1,100, while the Nasdaq composite fell 4%. The economy has already shown weakness, mainly through surveys reflecting greater pessimism. A widely studied set of real-time data published by the Federal Reserve Bank of Atlanta shows that the US economy may already be contracting.

When asked over the weekend if he expected a recession in 2025, Trump told Fox News Channel, “I hate to anticipate things. There will be a transition since what we are undertaking is quite large. We are returning prosperity to America. That’s a major deal. He then remarked, “It takes some time. “It takes some time.”

Trump has stated that one of his motives for imposing tariffs is to bring manufacturing jobs back to the United States. His Treasury Secretary, Scott Bessent, noted that the economy may experience a “detox” period as it weans itself from the government’s addiction to spending. The White House is attempting to minimize government expenditure while reducing the federal workforce and boosting deportations, which may impede the labor market. The US labor market is still exhibiting robust hiring, and the economy concluded last year on a strong note. However, experts are lowering their expectations for how the economy will fare this year.

On Monday, Trump met with CEOs from the technology business, but the gathering was closed to the media. So far, fears have stung Wall Street’s greatest stars the hardest. Big Tech stocks and firms that benefited from the artificial intelligence mania in recent years have fallen substantially.

Nvidia slumped another 5.1% on Monday, taking its year-to-date loss to over 20%. It’s a significant dip from its roughly 820% gain in 2023 and 2024. Elon Musk’s Tesla plummeted 15.4%, bringing its loss for 2025 to 45%. After receiving an early post-election boost on the belief that Musk’s tight relationship with Trump will benefit the electric vehicle firm, the stock has fallen on concerns that its brand has become inextricably linked with Musk. The 10-year Treasury yield fell to 4.22% from 4.32% late Friday. It has been falling since January when it was nearing 4.80%, as concerns about the economy have intensified. That’s a significant change in the bond market.

Overall, the S&P 500 slid 155.64 points to 5,614.56. The Dow Jones Industrial Average fell 890.01 to 41,911.71, while the Nasdaq composite fell 727.90 to 17,468.32. In energy markets, benchmark US crude fell 17 cents to $65.86 per barrel. Brent crude, the worldwide benchmark, declined 9 cents to $69.19 a barrel. The US dollar slipped to 146.92 Japanese yen in currency trading from 147.14. The euro costs $1.0858, up from $1.0839.