Asian stocks fell on Tuesday as investors reacted to a series of market-altering announcements from US President Donald Trump, including the unprecedented removal of a Federal Reserve governor and threats of new export restrictions on microchips. The moves unsettled global markets following Friday’s optimistic signals from Federal Reserve Chairman Jerome Powell, which had hinted at potential interest rate cuts in the United States.
Tokyo’s Nikkei 225 led the losses with a 1% drop, while Hong Kong, Shanghai, Seoul, and Sydney also recorded declines. Only Taipei managed a slight gain. European markets opened lower in early trading, with London, Paris, and Frankfurt all showing modest losses. The downward trend followed Wall Street’s retreat on Monday, as investors shifted focus from tech earnings, including Nvidia’s upcoming report, to broader economic and policy risks.
Trump’s announcement to remove Federal Reserve governor Lisa Cook, citing alleged false statements on mortgage agreements, sparked concerns over central bank independence. The unusual move could face legal challenges, highlighting the growing tension between the White House and the Fed. The dollar initially fell after the news but stabilized following Cook’s statement pledging to continue in her role, while gold prices rose as investors sought safe-haven assets.
Further market anxiety stemmed from Trump’s vow to impose “substantial additional tariffs” on countries that implement digital taxes and regulations perceived as harmful to US tech companies. He also threatened export restrictions on “highly protected” US technology and chips, intensifying uncertainty for global technology markets and supply chains.
Economic indicators remain in focus, with a US GDP report scheduled for Thursday and a key inflation gauge expected on Friday. Meanwhile, oil prices edged lower amid speculation about a potential peace deal in Ukraine, reversing recent gains. Investors are closely monitoring these developments for clues on future interest rate movements and global market stability.
Source: Punch