Stocks in the US and Asia fall as fears grow over economic slowdown
Asian stock markets fell after President Donald Trump triggered a U.S. sell-off, without excluding advice from his tariffs that could trigger a recession in the world’s largest economy.
When Trump’s comments said that when the U.S. economy was in a “transitional period”, people were asked about concerns about a potential recession.
The president has not commented directly on the economy since the remarks, but his top officials and advisers have tried to worry investors.
“Previous Trump is reassessing as the stock market president,” said Charu Chanana, investment strategist at Saxophone Investment Bank.
In Sunday’s Fox News interview, but recorded on Thursday, Trump appears to acknowledge concerns about the economy. “I hate to predict things like this,” he said. “There was a transition period because we were doing a lot. We brought wealth back to the United States. It was a big deal.”
In Tuesday morning trading, Japan’s Nikkei 225 fell 1.7%, South Korea’s Kospi fell 1.5%, and Hong Kong’s Hang Seng Index fell 0.7%.
In New York on Monday, the S&P 500, which tracks the largest U.S. companies, fell 2.7% in trading days, while the Dow Jones industrial average fell 2%.
The attacks on Nasdaq High Technology were particularly severe, down 4%.
Tesla shares fell 15.4%, while artificial intelligence (AI) chip giant Nvidia fell more than 5%. Other major tech stocks, including Meta, Amazon and Alphabet, also fell sharply.
“Trump has been speculating on his speculation about the next move of tariffs, but the problem is that he is also making investors speculate, which is reflected in the terrible market sentiment,” said Tim Waterer, chief market analyst at financial services firm KCM Trade.
“While the recession talk may be too early, the prospect of achieving this is enough to put traders in a defensive mindset.”
“We see a strong disagreement between the animal spirit of the stock market and the actual situation of business and business leaders,” a White House official told reporters after Monday’s deal ended.
“The latter is obviously more meaningful to the economy’s commodity reserves than the former in the long term to long term,” the official added.
White House spokesman Kush Desai said in another statement later that day that “industry leaders” responded to Trump’s agenda, including tariffs, “investment commitments reached trillions of dollars.”
Last week, major U.S. markets resumed levels seen before Trump’s victory in November last year, initially welcomed by investors due to the desire for tax cuts and lighter regulations.
Investors are worried that Trump’s tariffs – a tax on goods applied for in the country – will lead to higher prices and weaken growth in the world’s largest economy.
“I think there is no doubt that Trump’s tariff levels on this will have to cause inflation,” Killik & Co investment manager Rachel Winter told Plan Today.
The president accuses China, Mexico and Canada of measures not enough to end illegal drugs and immigration into the United States. The three countries rejected the allegations.
Economist Mohamed El-Erian said investors were initially optimistic about Trump’s plans to lower and lower taxes while underestimating the possibility of a trade war.
He said the recent decline in stock markets that began last week reflects the adjustments to these bets.
“This is a complete change in market expectations,” he added, noting that investors are also responding to signs that businesses and households are starting to spend due to uncertainty, which could hurt economic growth.
But President Trump’s economic adviser Kevin Hassett opposes those who predict such a bleak prospect.
Hassett said in an interview with CNBC that there are many reasons for the U.S. economy, and tariffs on Canada, Mexico and China are already bringing manufacturing and employment to the U.S.
“There are many reasons to be extremely bullish on the future economy,” he said.
He acknowledged that there were some “spots” in the data for the quarter, which he fixed to the timing of Trump’s tariffs and “Biden inheritance.”
