Stock Market Today: Asian Shares Decline Amid Tariff Fears and AI Anxiety

BANGKOK (AP) — On Friday, shares in Asia experienced a downturn as major indexes in Japan, Hong Kong, and South Korea fell over 2%. This decline followed sharp drops in Wall Street indexes due to growing doubts surrounding the recent hype about artificial intelligence (AI) technology.

The concerns were compounded by President Donald Trump’s announcement regarding tariffs. He confirmed plans to implement a 25% tariff on imports from Mexico and Canada, and also to double tariffs on Chinese goods to 20%. These moves have left investors anxious about potential repercussions on the economy.

In Japan, the Nikkei 225 index fell by 3.4%, ending the day at 36,939.89. This drop was significantly impacted by large losses in technology shares. Major companies such as Tokyo Electron lost 5.3%, while Advantest and Disco Corp. faced losses of 9.4% and 11.1%, respectively.

Meanwhile, Hong Kong's Hang Seng index decreased by 2.3%, closing at 23,175.49, and the Shanghai Composite index dropped by 0.9% to finish at 3,358.28. South Korea's Kospi index also saw a drop of 3.2%, ending at 2,538.07. In Australia, the S&P/ASX 200 fell by 1.1% to 8,174.10, as concerns mounted.

On Wall Street the previous day, the S&P 500 fell by 1.6% to 5,861.57, while the Dow Jones Industrial Average saw a slight drop of 0.4%, ending at 43,239.50. The Nasdaq composite index suffered a significant 2.8% loss, finishing at 18,544.42.

The S&P 500 has now dropped five times in the last six trading sessions, following a recent record high. A lot of this decline can be attributed to worries regarding the U.S. economic outlook, especially relating to how these tariffs might aggravate inflation rates and lead to rising unemployment due to possible layoffs in the government sector.

Furthermore, Nvidia, a key player in the AI sector and influential stock on Wall Street, saw its shares plummet by 8.5% despite initially rising after reporting better-than-expected profits. This decline follows China's DeepSeek announcing a competing language model that doesn’t rely on expensive chips.

On the flip side, Berkshire Hathaway, the company led by investor Warren Buffett, experienced a 1.7% increase. The company has accumulated a significant amount of cash recently, leading to speculations about future investments, particularly in a market that some believe may currently be overvalued.

Trump's recent tariff announcements have also impacted Treasury yields. He stated that tariffs for imports from Canada and Mexico will be enacted as previously planned and further asserted additional tariffs on Chinese goods, which could inflame household prices and inflation.

This heightened uncertainty is posing a challenge for the Federal Reserve, which finds itself with limited tools to address an economy that is simultaneously slowing down while inflation remains high.

Reports indicate the U.S. economy still appears to be stable at this moment. However, there was an uptick in U.S. unemployment benefit claims last week, rising to a three-month high. Although this number remains far below levels typically seen during recessions, it’s a point of concern.

In the commodities market, U.S. benchmark crude oil saw a decrease of 32 cents, trading at $70.03 per barrel. Brent crude, the international benchmark, also fell by 33 cents to $73.24 per barrel. The U.S. dollar has weakened against Japanese yen and euro, signifying further market adjustments amidst these uncertainties.

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