Unlock Editor's Digest Lock for Free
FT editor Roula Khalaf will select your favorite stories in this weekly newsletter.
Global stocks fell on Friday, extending the sharp US market sale after Donald Trump's latest threat to impose burgeoning tariffs on imports, which added to investors' concerns about the health of the US economy.
The Nikkei 225 Index, which is home to many Japanese exporters, lost 3%, while the Korean Cospi fell 2.7% during morning trading. Hong Kong's Hang Sen index fell by 1.9%. China's benchmark CSI 300 index fell 0.5%.
The losses in Asia come after the Blue Chip S&P 500 lost 1.6% on Thursday, falling to 4.2% from last Wednesday, erasing the market's annual profits.
Tech Heavy Nasdaq Composite closed 2.8%, while Nvidia cut 8.4% even after Chipmaker reported that it had increased revenue by nearly 80% overnight.
Investors' lukewarm response to Nvidia's revenues left a vulnerable market against bad macroeconomic news. The barrage of the US president's latest announcement on China, Mexico and Canada's imports, released Thursday comes after recently released data showed a significant drop in US consumer and business sentiment.
“Nvidia didn't save the world,” said Mike Zigmont, co-head of trading at Visom Investment Group. “The results were great, but not as amazing as anyone would want to buy more stocks.”
“The Bears are now winning the fight,” he added.
After Trump's election in November, US stocks rose in hopes of the new administration enacting professional business economic policies, pushing the S&P 500 to its most recent record last Wednesday.
However, the indexes have been slipping lately. This is because concerns about the health of the US economy, caused by gusts of dark economic data, began to squeeze emotions.
Retailers are suddenly grabbed by “Unese,” according to Vandatrack, a data company that monitors the flow of retail transactions, where retail investors who have frequently stepped in to buy stocks whenever the market declines.
The US government debt was sold at 10-year Treasury yields as stocks fell.
The Treasury has come together in recent weeks as it is considered a safe haven during periods of market volatility and a growing list of data points to worsening the outlook for the world's largest economy.
On Friday, Asian investors acquired US debt, with Treasury yields falling 0.029 and 0.034 percentage points for two and ten years respectively.
The measure of dollar strength against baskets of the other six major currencies increased by 0.8%.
However, the fear of an imminent economic slowdown has been exaggerated for some market participants.
After a strong end of 2024, weak consumer sentiment data released last week “gives an opportunity to revise an over-expanded market,” said Stephen Blitz, TS Lombard's chief economist.
“Trump recession? Not too fast,” he added.
