Stocks Decline Amid Trump’s Trade War, China’s Deflation Concerns, and Economic Worries

Global stock markets faced declines on Monday, fueled by concerns over rising deflationary pressures in China and growing uncertainties surrounding U.S. economic policies under President Trump. Wall Street futures dropped, with the S&P 500 and Nasdaq expected to open lower by 0.5% and 0.6%, respectively. Meanwhile, Asian markets saw mixed results, with Hong Kong’s Hang Seng falling by 1.8%, while Japan’s Nikkei rose slightly by 0.4%. The Japanese yen and Swiss franc gained strength as investors sought safer assets.

China’s economy also showed signs of strain as its consumer price index (CPI) dropped sharply in February, marking the most significant decline in 13 months. Deflationary trends continued with producer prices falling for the 30th consecutive month. In response, the Chinese government pledged more stimulus to boost consumption and foster innovation, including a focus on artificial intelligence. Despite these efforts, investor sentiment remained dampened by deflationary pressures.

In the U.S., economic concerns intensified following President Trump’s refusal to rule out the possibility of a recession due to his trade policies. Trump’s stance on tariffs with China, Canada, and Mexico added to market uncertainty, particularly after weaker-than-expected job numbers in February. This continued a trend of soft economic data, which led to a drop in U.S. Treasury yields and a slight strengthening of the U.S. dollar.

The escalating trade war and market volatility also affected commodities and cryptocurrencies. Oil prices fell, with Brent crude dropping by 0.5%, while Bitcoin experienced a sharp decline, losing as much as 7.2% to reach its lowest value for the month. Despite hopes of looser regulations for cryptocurrencies under Trump’s policies, Bitcoin struggled, particularly after an executive order on crypto reserves that disappointed investors.

SOURCE: REUTERS