Asian Markets Plunge Amid Trade War Fears

Asian markets witnessed a sharp downturn as investor concerns over a potential U.S. recession and ongoing trade war intensified. Key indices in Japan, Taiwan, and Hong Kong saw significant drops, mirroring losses on Wall Street. U.S. stocks were downgraded as fears of economic slowdown spread.

Asian markets experienced a dramatic sell-off on Tuesday, exacerbated by a growing apprehension over a trade-induced U.S. recession. President Trump's recent comments about a potential 'transition period' further fueled investor anxiety, leading to significant drops in major stock indices across the region.

In response to the turmoil, the U.S. dollar and Treasury yields have dipped, as skittish investors sought refuge in safe-haven assets like the Japanese yen. Asia's key markets reacted with Japan's Nikkei and Taiwan's stocks plunging around 3%, while Australia's benchmark index reached a seven-month low. Even China's robust stock performance this year faltered with a 0.5% decline in the blue-chip index.

The domino effect of the market downturn accelerated concerns of an impending economic slowdown, as evidenced by a $4 trillion erosion in the S&P 500's value from its peak last month. Financial strategists suggest a calculated approach to restoring disinflation and stabilizing yields, while global investors brace for continued volatility.

(With inputs from agencies.)