Singapore, April 03: The global financial markets have been thrown into turmoil as the latest round of US tariffs escalates trade tensions, prompting investors to seek refuge in safe-haven assets like gold, bonds, and the yen.
Concerns over a potential recession have intensified, leading to sharp declines across stock markets worldwide.
Investor sentiment took a major hit after the US government implemented tariff increases that significantly raised import taxes to levels not seen in over a century.
The impact was immediate, with the Nasdaq plummeting 3.2%, European stock futures down by nearly 2%, and Japan’s Nikkei index dropping 3% to hit an eight-month low.
Technology giants bore the brunt of the downturn, with Apple’s valuation shrinking by over $240 billion as its stock plunged 7% in after-hours trading.
Nvidia also faced losses, with its market capitalization dropping 5.6%, wiping out $153 billion in value.
Bond Market
Bond markets reflected the growing uncertainty, as the yield on 10-year US Treasury bonds tumbled by more than 15 basis points to reach a five-month low of 4.04%.
Market analysts believe the economic outlook is becoming increasingly unpredictable, with expectations for Federal Reserve interest rate cuts rising, even as inflation risks mount due to higher tariffs.
The tariff hikes are particularly severe for Asian economies, with China facing a 34% levy, Japan 24%, Vietnam 46%, and South Korea 25%.
The European Union has been hit with a 20% tariff, further deepening global economic instability.
Fitch Ratings has highlighted that the average US import tax rate has soared to 22% under the current administration, compared to just 2.5% in 2024. Vietnamese markets reacted sharply, plunging by 6%.
Investors are now closely monitoring China’s response, as the country faces total tariffs exceeding 50% on its exports.
Speculation is mounting over whether Beijing will engage in negotiations or take countermeasures such as devaluing the yuan to offset the economic impact.
While Hong Kong’s markets slipped 1.5% and Shanghai’s declined by 0.5%, China’s vast domestic economy and potential government interventions may provide some buffer against the fallout.
Analysts warn that the coming days will be crucial in determining the direction of global markets.
The uncertainty surrounding the trade war’s next phase, coupled with fears of a prolonged economic slowdown, has left investors bracing for further volatility.
