Sharp Volatility and Growing Concerns in Asian and U.S. Markets: Amid recent developments in U.S. trade policy,
global markets experienced heightened volatility following President Donald Trump’s
announcement of a new tariff package—mainly targeting auto imports.
These actions have reignited investor fears over the global economic outlook,
inflation, and commodity prices, directly impacting performance across Asian and U.S. markets.

Contents

Decline in Asian Markets

Mixed Signals from the U.S.

Wall Street Retreats

Dollar and Bonds Hold Firm

More Volatility Ahead

Liquidity Hits Two-Year Low

Summary

Decline in Asian Markets

Equity indices in China, Hong Kong, and Japan posted steep losses on Thursday.
U.S. stock futures also fell during early Asian trading hours.
At the same time, both the Mexican peso and Canadian dollar weakened, reflecting growing investor caution.

Toyota Motor led the losses in Asian trading. At the same time, General Motors and Ford Motor
shares declined in post-market U.S. trading due to concerns over potential tariffs affecting the auto sector.

Mixed Signals from the U.S. Administration

Trump’s unexpected announcement of a 25% tariff on imported vehicles sent market shockwaves.
However, he later suggested that tariffs might be “very flexible.”
The uncertainty remains high, especially regarding China and
the potential sale of TikTok (owned by ByteDance) to a U.S. company.

According to Kyle Rodda, market analyst at Capital.com, these developments “shook market confidence once again”
and raised questions about the longevity of the current protectionist stance.

Wall Street Retreats, Led by the ‘Magnificent Seven’

In the U.S., significant indices declined sharply. The S&P 500 fell over 1%, led by the “Magnificent Seven” tech giants:
Apple, Amazon, Nvidia, Alphabet, Meta, Microsoft,
and Tesla are all heading toward their worst quarterly performance since 2022.

Nvidia and Tesla shares dropped by more than 5.5%,
while Microsoft declined after reports that it was pulling out of new data center projects in the U.S. and Europe.
The Nasdaq 100 fell 1.8%, the Dow Jones Industrial Average dropped 0.3%,
the Bloomberg Magnificent Seven Index lost around 3%, and the Russell 2000 slid by 1%.

Dollar and Bonds Hold Firm

Despite the broader sell-off, the U.S. dollar rose by 0.3%,
while the yield on 10-year U.S. Treasury bonds climbed to 4.35%.
Oil held onto commodity gains after a significant drawdown in U.S. inventories,
and gold remained near its record highs.

Warnings of More Volatility Ahead

Daniel Skelly, Head of Wealth Management Research at Morgan Stanley,
warned that volatility is here to stay—especially with the upcoming tariff deadlines.
He added that these announcements may mark the beginning of new negotiations rather than the end of trade tensions.

At the same time, analysts at Barclays, led by Venu Krishna,

revised their 2025 target for the S&P 500 downward—from 6600 to 5900 points,
citing pressure from tariffs and weakening survey data.

From City Index and Forex.com, Matthew Weller said that trade policy uncertainty
has undermined risk sentiment and could lead to a short-term bounce in the dollar and risk assets.
However, he noted such gains may not last unless clarity emerges around U.S. trade strategies.

Liquidity at a Two-Year Low

According to Deutsche Bank data, liquidity in S&P 500 futures contracts
based on the most active contract—has dropped to its lowest level in two years.

Dan Wantrobski from Janney Montgomery Scott said 2025 could prove challenging
for investors due to persistent geopolitical uncertainty and shifting liquidity conditions.
He added that recent recovery attempts in the market have begun to look “somewhat erratic.”
and emphasized maintaining caution until solid confirmation that the market has reached a bottom.

Summary

Trump’s shifting stance on tariffs has reignited market fears globally,
dragging down major indices like the S&P 500 and Nasdaq 100
and shares of key companies such as Tesla, Nvidia, Microsoft, Toyota, Ford, and General Motors.

Meanwhile, investors found partial relief in a stronger U.S. dollar,
rising bond yields, and stability in gold and oil prices
the next steps in U.S. trade policy will be critical in shaping future market direction.

Sharp Volatility and Growing Concerns in Asian and U.S. Markets

Sharp Volatility and Growing Concerns in Asian and U.S. Markets

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