Asian Markets Slip Amid Wall Street Sell-Off

Global markets are experiencing a sharp decline, with Asian shares falling for the third consecutive session on Tuesday.

The drop follows a turbulent day on Wall Street, where the Nasdaq 100 recorded its steepest decline since 2022. Investor anxiety is mounting, fueled by concerns that economic policies and geopolitical uncertainty could stifle growth in the world’s largest economy.

Equities in Australia, Japan, and South Korea took a hit, mirroring the downturn in the U.S. Stock futures for the S&P 500 and the Nasdaq 100 extended their losses in early Asian trading, while demand for safe-haven assets such as sovereign bonds surged. The U.S. Treasury market saw gains, and a key index tracking the dollar slightly dipped.

Market sentiment has shifted dramatically, with growing fears that the U.S. economy could be heading toward stagnation.

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Investors are reacting to the latest economic policies and geopolitical moves, including new tariffs and government spending cuts, which have created uncertainty about the country’s long-term financial stability.

The optimism that once buoyed U.S. markets has faded, replaced by fears of an impending recession. Less than two months ago, investors had high hopes, with stocks, Bitcoin, and the dollar enjoying a rally. However, the landscape has changed dramatically, prompting a reassessment of growth prospects.

“We’ve gone from an era of ‘animal spirits’ to serious concerns about a potential recession,” said Gina Bolvin, president of Bolvin Wealth Management Group. “This market is being driven by headlines—it could shift at any moment. Investors should brace for volatility, but long-term players may find opportunities ahead.”

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In the U.S., the S&P 500 fell by 2.7% on Monday, while the Nasdaq 100 tumbled 3.8%. Tech giants bore the brunt of the downturn, with Tesla plummeting 15% and Nvidia dragging chipmakers to their lowest levels since April.

The sell-off underscores concerns that even the resilient tech sector may not be immune to broader economic headwinds. Meanwhile, despite the global risk-off sentiment, mainland Chinese investors continued buying Hong Kong stocks at an unprecedented pace.

This surge in interest has been fueled by a tech rally, particularly after startup DeepSeek unveiled a groundbreaking artificial intelligence model, which many believe could revolutionize the industry.

Investors flocked to U.S. Treasuries, with the yield on 10-year bonds dropping nine basis points to 4.21% amid speculation that an economic slowdown could push the Federal Reserve to cut interest rates. The bond market turmoil also prompted about 10 major companies to delay their U.S. bond sales on Monday.

Oil prices took a hit as well, plunging to a six-month low, adding to concerns that economic activity might slow further. Meanwhile, the dollar remained relatively strong, posting a 0.2% gain.

The latest Wall Street turmoil represents a stark reversal from the resilience the U.S. economy has shown in recent years, even as global growth weakened. This shift is shaking the long-held perception of U.S. economic and market exceptionalism that has persisted for over a decade.

For investors, the coming weeks will be crucial in determining whether this downturn is a short-term correction or the start of a deeper economic shift.