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(Bloomberg) -- The global selloff in stocks deepened, sending US equity-index futures to fresh lows on concern that tariffs and government spending cuts will torpedo growth in the world’s largest economy. Cryptocurrencies slumped and bonds rallied.
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Asian shares fell for a third consecutive session Tuesday after Nasdaq 100 had its worst day since 2022. Australian stocks fell to the lowest in seven months and the Nikkei-225 Index sank to the lowest since September. Equity-index futures for the S&P 500, the tech-heavy Nasdaq 100 and European stocks slipped in Asian trading, extending a decline on Monday as Wall Street tempered bullish views. Yields on 2-year Treasuries slumped to the lowest level since October and a gauge of the dollar slipped.
Market sentiment is turning downbeat as investors become increasingly concerned about US economic growth stalling after President Donald Trump kicked off a tariff war and continued to cut spending while shaking up decades-old geopolitical relationships. That’s a remarkable shift in mood less than two months into Trump’s presidency, which was once welcomed on Wall Street sending stocks, Bitcoin and the dollar higher.
“We’ve gone from animal spirits to what are the odds of a recession,” said Gina Bolvin, president of Bolvin Wealth Management Group. “This is a headline-driven market; one that could change in an hour. Sit tight. Buckle up. We finally have the correction we were waiting for, and long-term investors will be rewarded again.”
Citigroup Inc. strategists downgraded US stocks to neutral from overweight while upgrading China to overweight, saying US exceptionalism is at least on pause. Citi upgraded China to overweight as the country looks attractive even after the rally.
Earlier, HSBC strategists raised their rating on European equities, excluding the UK, to overweight from underweight as they expect euro zone fiscal stimulus to be “a potential game-changer.”
Despite the global risk-off mood, mainland Chinese investors bought an unprecedented amount of Hong Kong stocks on Monday, continuing to boost their holdings amid a tech-driven rally this year. The stocks have been on a tear this year, thanks to the emergence of an artificial-intelligence model from startup DeepSeek that was considered a game-changer in the industry.