Global Stock Markets Decline Amid Growing Concerns About the Health of the Global Economy
Global stock markets have fallen for the second consecutive day, as investor concerns about the health of the global economy increase amid President Donald Trump’s erratic tariff system and fears of a slowdown in the U.S. economy.
Declines in Asian Markets
Asian stock markets saw significant drops, with the following movements recorded:
- The Japanese Topix index fell by 1.11%, while the export-oriented Nikkei index dropped by 0.64%.
- The South Korean Kospi index decreased by 1.28%.
- The Australian S&P/ASX 200 index declined by 0.9%.
U.S. Markets Also Experienced Losses
U.S. markets also saw sharp declines on Monday evening:
- The Nasdaq dropped 4%, losing 726.01 points, closing at 17,470.21 points, marking its worst performance in two and a half years.
- The broader S&P 500 lost 2.7%, or 155.21 points, closing at 5,614.99 points.
- The Dow Jones Industrial Average fell by 890.63 points, or 2.08%, ending at 41,911.09 points.
These declines were attributed to concerns about the economic impact of President Trump’s global trade war.
The Erosion of U.S. Market Dominance
According to the Financial Times, Wei Li, Head of Multi-Asset Investments at BNP Paribas China, stated that the exceptional dominance of U.S. stocks is beginning to fade, with expectations for European and Chinese indices to rise.
Chinese and Hong Kong stocks sharply dropped in early trading but later rebounded. The CSI 300 Index fell by 0.6%, while the Hang Seng Index in Hong Kong dropped by 1%, before the Chinese index rose by 0.32% and the Hang Seng stabilized.
Tech and Industrial Stocks Lead the Declines
Technology and industrial stocks were the main drivers of the declines in Asia. Taiwanese contract manufacturers such as TSMC and Foxconn dropped by 2.7% and 2%, respectively.
Samsung Heavy Industries in South Korea fell by 2.4%, while Japanese chip manufacturing equipment maker Disco dropped by 0.3%.
Impact on Chinese Markets
Tommy Fang, Head of Global Markets China at UBS, mentioned that the large-scale risk reduction session in the U.S. had less impact on Chinese markets, which were supported by local investors waiting for buying opportunities at lower prices.
Fang added that global markets will remain volatile this year, with news from Trump and his assistant Elon Musk continuing to dominate headlines.
Slight Recovery in Futures Markets
Futures markets indicated a slight recovery in both the U.S. and Europe:
- Futures tracking the S&P 500 index rose by 0.2%.
- Futures on the Stoxx Europe 600 index increased by 0.1%, while the DAX index rose by 0.3%.
Growing Interest in Chinese Tech Stocks
Other analysts noted that U.S. technology stocks performed strongly over the past year, prompting some investors to take profits. Wei Khun Chung, Senior Market Strategist at Bank of New York, stated that the growing appeal of Chinese technology companies, following significant progress in artificial intelligence by the startup Deep Seek, forced investors to reevaluate the high valuations of U.S. tech stocks.
Sources:
- Financial Times on global market movements and economic concerns.
- Insights from Wei Li, BNP Paribas China, and Tommy Fang, UBS.
- Data on performance of major global stock indices, including S&P 500, Dow Jones, Nikkei, and Hang Seng.