(Bloomberg) — Asian equities faced downward pressure at the open on Friday after US stocks fell past a key milestone, weighed down by US President Donald Trump’s trade war.
Equity futures for Japan declined while Australian stocks were little changed. On Thursday, the S&P 500 dropped 1.4% to a six-month low, bringing its three-week rout past 10% — a correction in trader parlance. The Nasdaq 100, also in a correction, fell 1.9%. Gold rose to a record as investors scooped up safer assets.
China was a rare bright spot. Hong Kong equity futures climbed more than 1% after an index of US-listed Chinese stocks largely sidestepped Thursday’s equity market losses, closing only 0.2% lower.
The retreat from risk has lopped $5 trillion from the US equity benchmark. This year’s selloff in megacaps deepened, amplifying the moves, and rippled across speculative corners from unprofitable tech to the most-shorted shares. An $8 billion exchange-traded fund tracking junk bonds saw one of its biggest losses in 2025. Bitcoin fell Thursday before rebounding early Friday in Asia.
“In only a few weeks, the broader market has gone from record highs to correction territory,” said Adam Turnquist at LPL Financial. “Tariff uncertainty has captured most of the blame for the selling pressure and is exacerbating economic growth concerns.”
Treasuries rallied Thursday taking four basis points off the US 10-year yield which ended the session at 4.27% while an index of the dollar edged higher, as investors sought haven assets. US wholesale inflation stagnated in February thanks to a sharp decline in trade margins.
In another sign of a trade-war escalation, Trump threatened to enact a 200% tariff on European wine, champagne and other alcoholic beverages. Later Thursday, Trump said he would not repeal tariffs on steel and aluminum that took effect this week, nor back off plans for sweeping reciprocal tariffs on global trading parters set to start as soon as April 2.
Former Treasury Secretary Steven Mnuchin discounted risks of a US recession, and played down the current selloff in equities, advising investors against overreacting to Trump’s aggressive trade tactics.
“We came in with the market being fully priced, so I think a 5% to 10% correction on the S&P or the Nasdaq actually makes sense,” Mnuchin said in a Bloomberg interview Thursday.
In Asia, data set for release includes international reserves for Thailand. Money supply data for China is due any time through march 15. Markets are closed in India.
US Recession
The Federal Reserve’s Treasury-based recession model flagged year-ahead recession risk a year ago, and may be proven right if tariff uncertainty continues to hamper economic activity, according to Gina Martin Adams and Michael Casper at Bloomberg Intelligence.
Historically, a model reading exceeding 30% has accurately predicted recession one year out. And the current probability is 29.76%.
“The Treasury market is flirting with recession signals, helping amplify the risk-off sentiment in equities, while at the same time sending an alternative message of relative calm with relatively tight credit spreads,” they added.
However, US equities are pricing in a recession risk much bigger than credit markets, leaving room for a positive surprise, according to JPMorgan Chase & Co. strategists including Nikolaos Panigirtzoglou and Mika Inkinen wrote in a note.
“While there is clearly elevated uncertainty in the near term as the Trump Administration has at least initially prioritized more disruptive polices, the risk is that credit markets are proven right,” they said.
Elsewhere, oil fell with West Texas Intermediate sliding 1.7% to settle below $67 a barrel, following a 2.2% jump on Wednesday that was its biggest gain in almost two weeks.
Key events this week:
- US University of Michigan consumer sentiment, Friday
Some of the main moves in markets:
Stocks
- S&P 500 futures rose 0.5% as of 8:07 a.m. Tokyo time
- Hang Seng futures rose 1.3%
- Australia’s S&P/ASX 200 was little changed
Currencies
- The Bloomberg Dollar Spot Index was little changed
- The euro was little changed at $1.0851
- The Japanese yen was little changed at 147.95 per dollar
- The offshore yuan was little changed at 7.2473 per dollar
- The Australian dollar was little changed at $0.6286
Cryptocurrencies
- Bitcoin rose 1.3% to $81,402.79
- Ether rose 2% to $1,879.1
Bonds
- Australia’s 10-year yield declined two basis points to 4.40%
Commodities
- West Texas Intermediate crude rose 0.5% to $66.85 a barrel
- Spot gold was little changed
This story was produced with the assistance of Bloomberg Automation.
©2025 Bloomberg L.P.
