Asian shares fell sharply Monday following a broad sell-off on Wall Street that marked the worst trading day for U.S. stocks as April, fueled by escalating concerns over global trade tensions adn a weakening Chinese economy. The downturn underscores investor anxieties about slowing economic growth and the potential for further disruptions to international commerce.
On Friday, the S&P 500 dropped 0.8%, the Nasdaq Composite shed 1.0%, and the Dow Jones Industrial Average lost 0.7%. The declines followed former President Trump‘s renewed threat to impose tariffs on China, perhaps exacerbating trade friction between the world’s two largest economies.
Oil prices also experienced volatility. The price of a barrel of benchmark U.S. crude sank 4.2% to $58.90 on Friday, coinciding with a ceasefire between Israel and Hamas in Gaza, which eased concerns about potential oil supply disruptions. Brent crude, the international standard, dropped 3.8% to $62.73 per barrel. However, early Monday, U.S. benchmark crude oil gained 88 cents to $59.78 per barrel, and brent crude was trading 92 cents higher at $63.65 per barrel.
In the bond market, the yield on the 10-year Treasury sank to 4.05% from 4.14% late Thursday, a move already underway before Trump’s tariff threats, influenced by a University of michigan report indicating continued low consumer sentiment.
Currency markets also saw movement, with the dollar falling to 151.87 Japanese yen from 151.89 yen late Friday, and the euro climbing to $1.1627 from $1.1614.
The market had been facing scrutiny over valuations, with the S&P 500 remaining near its all-time high despite a nearly 35% run from its April low. Critics have pointed to a disconnect between rising stock prices and corporate profits, notably within the artificial-intelligence sector, drawing comparisons to the dot-com bubble of the early 2000s. For stock valuations to be justified, either prices need to fall or corporate profits need to increase.