London, UK – February 25, 2025 – Global stock markets faced renewed pressure on Tuesday after U.S. President Donald Trump announced fresh restrictions on Chinese investments, particularly in the technology sector, raising fears of an escalating trade war.

Market Reactions

While London’s FTSE 100 posted slight gains, stock indices in Paris and Frankfurt fluctuated, with defence and banking stocks showing resilience. However, Asian markets tumbled, and Wall Street struggled, as investors grappled with uncertainty over U.S. tariff policies and their impact on global growth.

According to Matt Britzman, senior equity analyst at Hargreaves Lansdown, investors are increasingly uneasy about the ripple effects of new U.S. trade policies on global markets and inflation.

Trump’s Tariff Announcement Adds Pressure

On Monday, Trump confirmed his intent to proceed with tariffs on Canada and Mexico once the current 30-day suspension expires next week. The levies—initially postponed for negotiations—are set to take effect without further delay. Meanwhile, tariffs on Chinese goods were enforced immediately.

Additionally, Trump signed a weekend memo calling for strict investment restrictions in key U.S. industries such as technology, infrastructure, healthcare, and energy, further straining relations between the world’s two largest economies.

AJ Bell investment director Russ Mould noted that:

“Trump’s first term was defined by trade wars. Now, we could be entering a tech war, with the world taking on China.”

Asian Markets Slide Amid Tech Sell-Off

Fears of a new trade war sent Asian stocks tumbling:

• Hong Kong’s Hang Seng Index dropped 1.3%, with Alibaba and JD.com losing over 3%, while Tencent fell nearly 3%.
• Shanghai’s Composite Index declined 0.8%, while Tokyo’s Nikkei 225 sank 1.4%.
• Seoul’s market also retreated after South Korea’s central bank cut its economic growth forecast and lowered interest rates, citing the impact of U.S. tariffs and political instability following President Yoon Suk Yeol’s brief martial law declaration in December.

Adding to market anxiety, China’s DeepSeek AI chatbot has disrupted the tech industry, causing investors to reconsider their high-risk bets on AI stocks. Nvidia’s upcoming earnings report is now seen as a key indicator of where the sector is headed.

Bitcoin Drops, Crypto Industry Faces Setbacks

The cryptocurrency market also took a hit, with Bitcoin falling below $90,000 for the first time in over a month, as optimism over Trump’s potential deregulation of crypto faded.

Further compounding concerns:

• The $1.5 billion hack of Dubai-based exchange Bybit—the largest crypto theft in history—sent shockwaves through the industry.
• A memecoin scandal in Argentina added to volatility in digital asset markets.

Corporate Shake-Ups

In corporate news, British consumer goods giant Unilever saw its shares decline by 2% following the unexpected resignation of CEO Hein Schumacher, less than two years into his tenure.

Market Overview at 1100 GMT

Stock Indices

• London – FTSE 100: UP 0.3% at 8,686.25 points
• Paris – CAC 40: DOWN 0.1% at 8,081.10 points
• Frankfurt – DAX: DOWN 0.1% at 22,396.74 points
• Tokyo – Nikkei 225: DOWN 1.4% at 38,237.79 points (close)
• Hong Kong – Hang Seng: DOWN 1.3% at 23,034.02 points (close)
• Shanghai – Composite: DOWN 0.8% at 3,346.04 points (close)
• New York – Dow Jones: UP 0.1% at 43,461.21 points (previous close)

Currencies & Commodities

• Euro/Dollar: UP at $1.0473 from $1.0468 (Monday)
• Pound/Dollar: UP at $1.2625 from $1.2623
• Dollar/Yen: UP at 149.79 from 149.76
• Euro/Pound: UP at 82.97 pence from 82.91 pence
• WTI Crude Oil: Flat at $70.71 per barrel
• Brent Crude: UP 0.3% at $74.24 per barrel

With trade tensions escalating and investors closely watching developments, global markets remain on edge as the uncertainty surrounding Trump’s economic policies unfolds.