From Wall Street to Asia: Trade War Fears Wipe Out $1 Trillion in Market Value and Investors Flee to Safety as Escalating Trade War Roils Global Markets
Asian equities suffered heavy losses on Monday, with Japan’s Nikkei 225 plummeting nearly 8%—its worst single-day drop in over a year—as investor panic spread following a sharp decline on Wall Street. The selloff came after China unveiled retaliatory tariffs against the U.S., escalating fears of a full-blown trade war that could derail global economic growth.
Wall Street’s Slide Sparks Contagion
U.S. stocks closed deep in the red on Friday, with the Dow Jones Industrial Average shedding 350 points as trade war anxieties intensified. The S&P 500 and Nasdaq Composite also posted significant declines, reflecting broad-based market unease. Analysts at Goldman Sachs now estimate a 45% chance of a U.S. recession within the next 12 months, up from 30% just weeks ago, citing deteriorating trade relations and tightening financial conditions.
China’s Retaliation Fuels Economic Fears
The latest market turmoil was triggered after Beijing announced tariffs targeting key U.S. exports, including agricultural products and automobiles—a direct response to President Trump’s recent imposition of steep import duties on Chinese goods. The tit-for-tat measures have raised concerns that prolonged trade hostilities could disrupt supply chains, slow corporate earnings growth, and push inflation higher.
Broader Economic Risks Emerge
Beyond equities, the uncertainty has spilled into currency and commodity markets:
– The yen and Swiss franc strengthened as investors sought safe havens.
– Industrial metals like copper declined on fears of slowing demand.
– Oil prices dipped amid concerns over weakening global growth.
