Market Turmoil: Stocks Plunge as Trade War Weighs on Global Economy

Asian and European markets face significant declines amid global trade tensions and unpredictable U.S. policies. The dollar weakens as investors shy away, reflecting fears sparked by tariffs and potential global trade wars. With U.S. leadership shifts, markets remain volatile, impacting future capital investments and manufacturing decisions.

In a turbulent week for global markets, Asian indices, notably the Nikkei, suffered steep losses of 9.6%, marking the worst drop since early 2020. European stock futures followed suit with declines ranging from 0.3% to 0.6%, making investors wary amid escalating trade tensions.

The dollar weakened considerably, losing 2.7% against the yen and 3.0% against the Swiss franc, while the euro rose 2.4%. These shifts underscore investor concerns over U.S. trade policies, which threaten to unravel the longstanding preference for American equities.

The potential long-term effects are grave, as uncertain U.S. policies deter capital investment. Analysts warn that further global trade strife could redirect investment flows, squeezing unhedged foreign investors on Wall Street and posing challenges for major firms like Apple with entrenched Asian supply chains.

(With inputs from agencies.)