On Monday, Asian markets witnessed a significant downturn, further exacerbating a global equities sell-off that stemmed from escalating tensions surrounding U.S. President Donald Trump’s trade policies. Investors turned cautious following Trump’s announcement of steep tariffs, leading to a wave of panic selling that swept through international stock markets.
Japan’s stock market bore the brunt of the impact, with its benchmark Nikkei index falling by more than 8% shortly after the market opened. This marked a notable decline, as the index, which represents 225 of the country’s top companies, fell below the 33,000 level for the first time since August 2024, as reported by Reuters. The Topix index, which offers a broader gauge of the market, also experienced heavy losses, trading more than 7.5% lower before making a slight recovery.
In an attempt to address the crisis, Japan’s Prime Minister Shigeru Ishiba conveyed to parliament that his government would persist in requesting that President Trump reconsider the tariffs imposed on Japan, though he acknowledged that meaningful results would not materialize overnight. “As such, the government must take all available means to cushion the economic blow from US tariffs, including funding support for domestic firms and job protection measures,” Ishiba reportedly stated.
Wider market sentiment mirrored this downturn as Asian equities faced one of the worst performances noted in the past five years. The financial malaise was compounded by the enormity of the losses in U.S. stock markets, which shed over $5.4 trillion in value. The volatility was seen ahead of further tariff announcements slated to take effect, stirring apprehension among global investors who perceived Trump’s escalating tariff regime as an aggressive measure that could hurt international trade dynamics.
Retaliation from China added fuel to the fire, as the nation imposed a staggering 34% tariff on all imports from the U.S. This response raised concerns about the potential for a damaging trade war that could impact economic stability on a global scale. As the international markets responded to these developments, U.S. stock futures tumbled dramatically.
In light of the upheaval, President Trump addressed reporters while aboard Air Force One, denying any deliberate intention to crash the markets. “What’s going to happen with the market? I can’t tell you, but I can assure you that our nation has become significantly stronger, and eventually it will be second to none in the world,” he remarked, alluding to an optimistic future despite the current turmoil.
As the trading day progressed, it became evident that the U.S. stock market was poised for a sharp drop as it opened, casting a shadow of uncertainty about the S&P 500, which was dangerously close to reaching bear market territory—defined as a decline of 20% from its peak. This troubling outlook raised alarms regarding broader implications for the economy.
In South Korea, the Kospi index plummeted more than 4.8% shortly after the market opened, triggering a brief trading halt as a circuit breaker deployed to avert panic selling kicked in. Taiwan’s market was similarly affected, with the Taiex index witnessing a staggering decline of over 9.7%. Key industry stocks, including major players like TSMC and Foxconn, experienced steep drops that prompted circuit breakers to activate as investors scrambled to reassess their positions.
Meanwhile, Australia’s ASX 200 index dropped by as much as 6.3% during morning trading, while New Zealand’s NZX 50 recorded losses exceeding 3.5%. The sharp decreases across these markets underscored the extensive reach of the turmoil triggered by the trade conflict, highlighting the interconnectedness of global financial systems and the potentially widespread repercussions of unilateral trade actions.
This story remains in development, as analysts and investors alike continue to monitor how the evolving trade landscape will shape market trajectories and economic performance going forward.