US stocks post worst quarter since 2022 amid tariff fears

Good morning and welcome again to FirstFT Asia. In right this moment’s e-newsletter:

• US equities endure sharp pullback in Q1

• Japan’s seismic warning

• Is Iran on a collision course with the west?

Wall Road shares posted their worst quarter in virtually three years on fears that Donald Trump’s tariffs will usher in a interval of stagflation on this planet’s largest economic system.

What’s occurring: The S&P 500 dropped 4.6 per cent within the first three months of 2025, the worst efficiency for the reason that third quarter of 2022, FactSet knowledge exhibits. The blue-chip index rose 0.6 per cent yesterday. Traders are bracing themselves for Trump’s “Liberation Day” occasion tomorrow, wherein the US president is predicted to announce recent tariffs, on high of present levies on imports of products equivalent to metal and aluminium.

What to anticipate: Sharon Bell, senior equities strategist at Goldman Sachs, mentioned: “I don’t essentially see the ground fairly but [in stock prices].” Goldman on the weekend mentioned it now anticipated a 35 per cent likelihood of recession over the subsequent 12 months, up from 20 per cent beforehand.

International response: European equities outperformed the US, in a marked shift from 2023 and 2024 when Wall Road zoomed previous its rivals. Asian markets had been blended over the quarter, with Japan’s Topix sliding 4.5 per cent, China’s CSI 300 slipping 1.2 per cent, however Hong Kong’s Hold Seng rising 15 per cent per cent and Korea’s Kospi up 3.4 per cent.

“It’s way more the uncertainty total [that is] weighing on investor sentiment,” mentioned Charles De Boissezon, international head of fairness technique at Société Générale. “The [tariff] bulletins carry on altering, however what they’ve in widespread is that [they’re] simply not good for development globally.”

Here’s more on the tariff-fuelled uncertainty weighing on markets.

• People brace for brand spanking new tariffs: Many, together with a few of Trump’s supporters, are trying on the president’s “liberation day” with trepidation.

• Opinion: Anybody wanting to know Trump’s tariffs would do higher to think about the realpolitik than the financial idea, writes Rana Foroohar.

• Extra US information: Trump’s administration has launched a assessment into measures to deal with alleged antisemitism at Harvard College that might freeze up to $9bn in federal grants to the establishment.

Right here’s what else we’re preserving tabs on right this moment:

• Financial knowledge: Australia studies February retail commerce figures and Japan publishes its labour drive survey for the month.

• Financial coverage: The Reserve Financial institution of Australia is predicted to hold rates steady when the central financial institution pronounces its resolution right this moment. (Yahoo Finance)

• Management adjustments: Ivan Espinosa turns into Nissan’s chief government whereas Sony President Hiroki Totoki takes on the CEO function of the Japanese tech conglomerate.

5 extra high tales

1. Japan’s long-dreaded “massive one” earthquake might kill virtually 300,000 folks alongside its urbanised Pacific coast, a brand new authorities forecast has warned. The report mentioned a magnitude 9 quake in the Nankai Trough could cause $1.8tn of economic damage, equal to roughly half the nation’s annual GDP.

2. The US has imposed sanctions on senior Chinese language and Hong Kong safety officers for transnational repression and degrading the autonomy of the territory. Washington positioned the sanctions on six officers, including the commissioner of the Hong Kong police force, in response to China’s crackdown on pro-democracy activists within the territory. 

3. Probably the most outstanding shareholder activists in Japan has accused Nippon Metal of harming minority buyers in one in all its largest subsidiaries, because the steelmaker makes an attempt to push forward with a politically fraught $15bn takeover deal within the US. 3D Funding Companions has constructed a roughly 10 per cent stake in IT providers group NS Options and is pushing for Nippon Steel to grant the subsidiary far more independence.

4. French far-right chief Marine Le Pen has been banned from standing for workplace for 5 years with fast impact and sentenced to jail after being convicted of embezzling EU funds. The courtroom ruling, which analysts described as a “major turning point in French political life”, is more likely to block Le Pen from working within the 2027 presidential election, for which she was one of many favourites. Le Pen has vowed to attraction in opposition to the decision.

5. Gross sales at one in all China’s largest property builders fell by greater than a 3rd final 12 months, because the nation’s actual property market struggled to emerge from a slowdown now in its fourth 12 months. The stoop in gross sales at Nation Backyard was the largest annual drop for the group since a nationwide property crisis began in 2021 with the collapse of developer Evergrande.

The Huge Learn

Seven years in the past, Trump tore up an accord with Iran that strictly restricted its nuclear actions and had the buy-in of Europe, Russia and China. Now again within the White Home, the president is confronting the repercussions, as Tehran has aggressively expanded its nuclear exercise and is now locked on a collision course with the west that’s set to return to a head this 12 months.

We’re additionally studying . . . 

Chart of the day

China was focused by a report variety of disputes on the World Commerce Group final 12 months because the nation’s booming exports swamped worldwide markets and triggered objections from its business companions. New analysis confirmed that Beijing accounted for nearly half of all disputes lodged at the global trade body in 2024.

Take a break from the information . . . 

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