Asian markets track Wall St selloff as Trump-fueled economy fears build

HONG KONG, China – Asian markets tumbled Tuesday following a sharp sell-off on Wall Street fuelled by fears about the US economy as Donald Trump presses ahead with his global trade war and federal jobs cuts.

Traders had initially welcomed his election on optimism that his promised tax cuts and deregulation would boost the world’s top economy and help equities push to more record highs.

But there is now a growing pessimism that a recession could be on the cards amid warnings that tariffs imposed on key trade partners will reignite inflation and force the Federal Reserve to hike interest rates again.

READ: Trump declines to rule out 2025 US recession

The president’s weekend comments that the economy was facing “a period of transition” and his refusal to rule out a downturn did little to soothe investor worries.

A new wave of tariffs due this week will see steep levies of 25 percent on steel and aluminum imports.

Uncertainty over Trump’s tariffs and threats have left US financial markets in turmoil and consumers unsure of what the year might bring.

Fears about the future battered Wall Street, where the Nasdaq tanked four percent owing to another plunge in high-flying tech titans including Apple, Amazon and Tesla.

And Asia followed suit, with losses across the board.

Tokyo was among the main losers after Japanese Trade Minister Yoji Muto said he had failed to win an immediate exemption from US tariffs.

Hong Kong and Shanghai extended Monday’s selling that was stoked by a big miss on Chinese consumer prices that added to worries about the Chinese economy.

Sydney, Singapore, Seoul, Taipei, Wellington and Manila were also deep in negative territory.

“Economic uncertainty and recession fears have intensified, partly driven by President Trump’s weekend comments about the economy being in “a period of transition” and his reluctance to rule out a recession,” said Shaun Murison, senior market analyst at IG online trading platform.

“This uncertainty has heightened investor anxiety. Trump’s trade policies, including ongoing tariff discussions are creating uncertainty and fears of economic slowdown.

“These tariffs could potentially elevate prices and complicate efforts to reduce interest rates.”

The plunge in sentiment across markets in the past few weeks has filtered through to other risk markets, with bitcoin falling below $80,000 on Monday to its lowest level since November — having hit a record close to $110,000 in January.

The cryptocurrency’s losses have also been driven by disappointment that Trump signed an executive order to establish a “Strategic Bitcoin Reserve” without planning any public purchases of it.

Oil extended Monday’s drop of more than one percent amid worries about demand as US recession speculation builds.