Asian markets showed uneven performance Monday as investors grappled with US tariff fears and fresh warnings about a global economic slowdown. The cautious trading followed Wall Street's worst session in two months, with the S&P 500 plunging 1.7% on Friday amid weakening business activity data.
Key regional indices reflected the uncertainty:
- Hong Kong’s Hang Seng edged up 0.1% to 23,494.21
- Shanghai Composite dipped 0.2% to 3,373.03
- South Korea’s Kospi fell 0.4% as Taiwan’s Taiex lost 0.7%
The sell-off stemmed from S&P Global’s alarming business survey showing US service sector contraction.
Companies report widespread concerns about federal policies, from tariffs to spending cuts,warned Chris Williamson of S&P Global Market Intelligence. Analysts now predict tariff-related price hikes could accelerate inflation beyond previous estimates.
New consumer data reveals Americans anticipate 4.3% inflation within a year – a full percentage point higher than last month’s forecast. This stark increase coincides with:
- Stalled US home sales due to 7%+ mortgage rates
- Small-cap stocks plummeting 2.5% Friday
- Cybersecurity firm Akamai crashing 21.7% despite strong earnings
The Federal Reserve faces mounting pressure as tariff impacts complicate inflation control.
We’ve adjusted forecasts to account for trade weakness through 2024,noted S&P economist Ken Wattret, highlighting weaker investment as a critical risk factor.
With Brent crude holding near $74/barrel and the dollar strengthening to 149.43 yen, markets await clarity on three fronts:
- Upcoming US-China trade negotiations
- Fed’s response to policy-driven inflation
- Q2 corporate earnings revisions
As analysts debate whether this marks a correction or prolonged downturn, one truth emerges: tariff uncertainty has become the new constant in global finance.
