Washington: Asian stock markets witnessed a downturn following U.S. President Donald Trump's acknowledgment that tariffs imposed by the U.S. on other countries could potentially push the American economy into a recession.
During a televised interview, when asked about the possibility of an economic recession, President Trump stated that the U.S. economy was going through a "period of transition."
Following Trump’s remarks, which aired on Sunday, officials and advisors from his administration have been attempting to reassure investors. However, their efforts appear to be ineffective in calming market concerns.
Charo Chanana, an analyst from Saxo Bank, commented that Trump was previously perceived as a stock market-friendly president, but this perception is now being reevaluated.
At the start of trading on Monday morning, Japan’s Nikkei 225 index dropped by 1.7%, South Korea’s market fell by 1.5%, and Hong Kong’s Hang Seng Index declined by 0.7%.
On Wall Street, the S&P 500 ended Monday’s trading session down by 2.7%, while the Dow Jones Industrial Average fell by 2%.
The tech-heavy Nasdaq took the biggest hit, closing the day with a sharp decline of 4%.
Shares of Tesla, led by Trump ally Elon Musk, plunged by more than 15%. Nvidia, a major producer of AI chips, saw its stock price drop by over 5%. Other tech giants, including Meta, Amazon, and Alphabet, also experienced losses.
Tim Water, chief market analyst at financial services firm KCM Trade, remarked that political leaders are speculating about Trump’s next move on tariffs, but the issue is that investors are also left guessing.
"The market’s somber mood is evident. While discussing a recession might be premature, the mere possibility is enough to put investors into a defensive mindset," he added.
