New York, US:
Share markets across the globe witnessed sharp losses after a selloff in America, triggered by US President Donald Trump on Monday refusing to rule out the suggestion that his tariffs could trigger a recession in the world’s biggest economy. US bond yields also dropped as investor worries about the potential economic slowdown were exacerbated by Trump’s remarks saying the US economy was in a “period of transition”, amid his fluctuating trade policies on Mexico, Canada, and China, which could dampen consumer demand and corporate investment.
In New York, tech-heavy Nasdaq saw the worst day since 2022. The benchmark S&P 500, which tracks the biggest American companies, has also fallen over 8 per cent from its February high.
The US President has not commented directly on the economy since the troubling remarks, but his top officials and advisers have sought to calm investor fears.
Markets In Red
On Monday, the S&P 500 ended the trading day 2.7 per cent lower–its lowest closing level since September and its biggest daily percentage decline since December. The Dow Jones Industrial Average, meanwhile, dropped 2 per cent, for its lowest close since November 4, the day before Trump’s election as President. The Nasdaq Composite plunged 4 per cent to a near six-month low.
The Nasdaq confirmed a correction last week, having tumbled more than 10 per cent from its December all-time high. MSCI’s global stock index also fell more than 2 per cent for its biggest one-day drop, touching its lowest level since January 13.
Shares of Trump’s aid Elon Musk’s Tesla saw a decline of about 15.4 per cent, while artificial intelligence (AI) chip giant Nvidia was down more than 5 per cent. Other major tech stocks including Meta, Amazon and Alphabet also saw a steep plunge.
In early trade on Tuesday, Japan’s Nikkei 225 was down 2.5 per cent, South Korea’s Kospi was 2.3 per cent lower and Australia’s S&P/ASX 200 was off by 1.8 per cent. Indian markets are also expected to open in red,
Earlier, the pan-European STOXX 600 index had ended down 1.29 per cent.
In fixed income, yields fell with US government bonds in demand after the Trump interview cut into investor confidence. The 2-year note yield, which typically moves in step with interest rate expectations for the Federal Reserve, fell 10.4 basis points to 3.898 per cent, from 4.002 per cent late on Friday, on track for their largest daily drop since September.
The yield on benchmark US 10-year notes fell 9.3 basis points to 4.225 per cent while the 30-year bond yield fell 6.9 basis points to 4.548 per cent.
In currencies, investors looked for safety. Against the Japanese yen, the dollar weakened 0.5 per cent to 147.29. However, the euro was down 0.06 per cent at $1.0826 and Sterling weakened 0.45 per cent to $1.2862.
Oil prices also sank as tariff uncertainty kept investors on edge along with rising output from OPEC+ producers, although potential sanctions on Iranian oil exports limited losses. American crude settled down 1.51 per cent or $1.01 at $66.03 a barrel while Brent settled at $69.28 per barrel, down $1.08 or 1.53 per cent.
Gold prices also plunged as profit-taking countered support from safe-haven demand fueled by geopolitical uncertainty, with focus on the US inflation data later this week. Spot gold fell 0.86 per cent to $2,885.63 an ounce. US gold futures fell 0.76 per cent to $2,882.70 an ounce. Copper declined 1.25 per cent to $9,493.00 a tonne.
In cryptocurrencies, bitcoin fell 4.88 per cent to $79,028.58 after touching its lowest level since November.
