The Nikkei 225 Index tumbled 4.05% to close at 35,617 on Monday, hitting its lowest level in six months, as investors reacted to weakness on Wall Street and braced for new US tariffs set to take effect this week. The broader Topix Index also slumped 3.57% to 2,659, marking its lowest point in nearly three weeks. President Donald Trump is set to impose 25% tariffs on imported cars, a major blow to Japan’s key auto export sector, while also outlining plans for reciprocal trade duties. Domestically, investors digested mixed economic data, with industrial production exceeding expectations in February, while retail sales fell short of forecasts. All sectors declined, with sharp losses in technology, consumer, and industrial stocks. Notable decliners included Fast Retailing (-3.7%), Toyota Motor (-3.1%), Disco Corp (-8.4%), Fujikura (-5.2%), and Advantest (-7.7%). The Nikkei 225 declined 4.14% in March, marking its third consecutive monthly drop.
US stocks tumbled on Monday, with the S&P 500 losing 1.4%, Nasdaq sinking 2.4%, and the Dow Jones dropping about 300 points, as trade war concerns continued to weigh on the economic outlook and investor sentiment. Reciprocal tariffs are set to take effect on April 2nd, including a 25% levy on "all cars that are not made in the US." President Trump stated the tariffs would apply broadly to all countries, and reports suggest he has recently urged his advisors to adopt a more aggressive stance on trade measures. Megacaps Nvidia (-4.4%), Amazon (-3.5%), Meta (-3.5%), Alphabet (-1.6%), and Tesla (-7%) were under pressure, alongside General Motors (-0.5%) and Ford (-0.3%). For March, the S&P 500 is down more than 6%, marking its worst monthly decline since September 2022, while the Nasdaq has lost 8% and the Dow has fallen 5.2%. For Q1, the S&P 500 is down 5.1%, and the Nasdaq has plunged 10.3%, the steepest drop since 2022, while the Dow has shed 2.3%.
Frankfurt's DAX extended losses to trade nearly 2% lower near the 22,000 level on Monday, its lowest since February 10, in line with broader declines across European and global markets. Market sentiment soured after US President Donald Trump indicated that new "reciprocal" tariffs expected this week could target “all countries.” The uncertainty surrounding the scale and scope of the tariffs contributed to the negative sentiment. Meanwhile, Germany's consumer price inflation eased to 2.2% in March 2025, the lowest since November 2024, in line with market expectations, according to a preliminary estimate. On the corporate front, almost all stocks were in the red, with the exception of Deutsche Telekom (+0.2%). The index was on track to record a loss of over 2% for March. However, for Q1, the DAX is set to rise nearly 11%, mainly supported by Germany's massive spending plan.
