Asian markets are set to open lower following Wall Street’s struggles, characterized by intense volatility due to fluctuating tariff policies.
Asian equities are bracing for a rough start on Friday as Wall Street’s recent sell-off sent ripples across global markets. Wall Street experienced sharp declines as traders contended with erratic headlines surrounding tariffs.
In Australia, stocks fell over 1% at the opening, mirrored by downward trends in Japanese and Hong Kong futures, with Nikkei 225 contracts dropping more than 2%. This decline reflects heightened risk aversion and a stronger yen, adding pressure to Japan’s markets.
The S&P 500 fell by 1.8%, while the Nasdaq 100 plunged 2.8%, teetering on the edge of a technical correction. However, U.S. futures saw some recovery early Friday, buoyed by Broadcom Inc.’s optimistic revenue forecast, which bolstered confidence in artificial intelligence investments.
The tech sector, initially hit hard, saw a post-market recovery with gains in Nvidia Corp. and Marvell Technology Inc. following Broadcom’s forecast. In contrast, Thursday’s session had shown vulnerability among U.S. stocks, with the market struggling to bounce back after President Trump’s tariff deferral announcement on Mexican and Canadian goods.
Investors remain cautious amid the flip-flopping outlook on tariffs, prompting Chris Larkin from E*Trade at Morgan Stanley to note, ‘Trade policy is currently driving market movements. It’s likely to be a turbulent period for traders and investors until there’s more clarity.’
The U.S.’s decision to exempt Mexican and Canadian goods from a 25% tariff until April 2 added uncertainty, especially as Treasury Secretary Scott Bessent suggested that future tariff increases would have minimal inflationary impact and should be viewed as singular events.
U.S. Treasuries saw a rally at the short end of the yield curve, but the dollar index fell for the fourth consecutive session, marking its longest decline since September. Meanwhile, the Mexican peso and Canadian dollar strengthened with the prospect of tariff relief.
In Asia, Chinese Finance Minister Lan Fo’an emphasized the country’s preparedness to tackle potential domestic and international challenges, highlighting the government’s fiscal capabilities. China’s central bank intends to continue a moderately loose monetary stance, hinting at upcoming interest rate cuts.
Upcoming economic reports, including nonfarm payroll data from the U.S., are expected to provide further insights into the global economic trajectory, particularly for interest rates and inflation.
In commodities, oil prices edged slightly higher, ending a four-day losing streak, whereas Bitcoin continued to rise, breaking the $90,000 mark.
Amid uncertainty in global markets driven by fluctuating trade policies and economic indicators, Asian investors face a volatile period. With ongoing developments and key economic data on the horizon, market participants remain vigilant.
