Stock Market Today: Asian Shares Decline Amid AI Uncertainty and Tariff Increases

BANGKOK (AP) — Asian stocks saw a decline on Friday, with major indexes in Japan, Hong Kong, and South Korea dropping over 2%. This downturn followed a sharp decline in Wall Street indexes, fueled by concerns regarding the ongoing excitement surrounding artificial intelligence technology.

The situation worsened as former President Donald Trump announced a 25% tariff on imports from Mexico and Canada, in addition to doubling existing tariffs on Chinese goods to 20%. This news caused a wave of anxiety among investors.

In Japan, the Nikkei 225 index fell by 3.4%, reaching 36,939.89, largely due to a sharp decline in technology shares. Companies such as Advantest saw their stocks plummet by 9.4%, while Disco Corp. and Tokyo Electron lost 11.1% and 5.3%, respectively.

Hong Kong's Hang Seng index decreased by 2.3%, landing at 23,175.49, while the Shanghai Composite index fell by 0.9% to 3,358.28. Meanwhile, South Korea's Kospi index also declined, dropping 3.2% to 2,538.07.

In Australia, the S&P/ASX 200 index decreased by 1.1%, settling at 8,174.10.

On the previous day, Thursday, the S&P 500 dropped by 1.6% to 5,861.57. The Dow Jones Industrial Average experienced a smaller loss of 0.4%, closing at 43,239.50, while the Nasdaq composite saw a significant decline of 2.8%, finishing at 18,544.42.

The S&P 500 has now experienced a downturn in five out of the last six trading sessions following its recent all-time high. Concerns regarding the U.S. economic outlook are contributing to these declines, particularly fears that the imposed tariffs will exacerbate inflation and lead to increased unemployment due to potential layoffs in the government sector.

One of the standout stocks, Nvidia, a key player in the AI sector, fell by 8.5% despite an initial rise after reporting better-than-expected profits. This marked Nvidia's first profit report since a Chinese company, DeepSeek, claimed to have developed a competitive large language model without the use of costlier chips.

Despite negative trends, Berkshire Hathaway, led by Warren Buffett, gained 1.7%, providing some upward momentum on the index. Recently, Buffett has amassed a significant cash reserve, suggesting he may be waiting for more favorable investments amidst concerns that the market currently appears overpriced.

Following Trump's tariff announcements, Treasury yields fluctuated as he confirmed that the 25% tariffs on imports from Mexico and Canada would take effect on March 4. Additionally, he indicated that current tariffs on Chinese goods would face a further 10% increase.

Such measures may lead to higher prices for American households, compounding existing inflation issues. Although some market analysts view these threats as negotiation tactics, the ongoing discussions about tariffs have already contributed to increased anxiety about the economy, which could dampen household spending, a key driver for economic growth.

This uncertainty poses additional challenges for the Federal Reserve, which has limited tools to counteract a slowing economy coupled with rising inflation.

Presently, the U.S. economy appears to be in stable condition. Recent government reports maintained previous estimates for the last quarter of 2024 while adjusting inflation projections upward. Although a recent report indicated that more workers applied for unemployment benefits last week, at a three-month high, the figures still remain far from typical recession levels.

In other trading news early Friday, U.S. benchmark crude oil saw a decrease of 32 cents, trading at $70.03 per barrel. Brent crude, the international standard, fell by 33 cents to $73.24 per barrel.

The U.S. dollar also experienced movements, decreasing to 149.55 Japanese yen from the previous 149.82 yen, while the euro slipped to $1.0390, down from $1.0401.

stocks, Asia, tariffs