KUALA LUMPUR, March 14 (Bernama) -- The FTSE Bursa Malaysia KLCI (FBM KLCI) ended the week slightly higher, in line with regional indices despite the weaker performance on Wall Street overnight. At 5 pm, the FBM KLCI rose 2.12 points or 0.14 per cent to 1,512.15 from Thursday’s close of 1,510.03. The market bellwether opened 10.08 points lower at 1,499.95, and moved between 1,493.29 and 1,516.25 throughout the day. On the broader market, gainers outpaced losers with 680 to 292, while 437 counters were unchanged, 1,009 untraded, and 13 suspended. Turnover was marginally lower at 3.24 billion units worth RM2.5 billion from 3.25 billion units worth RM2.90 billion on Thursday.
Stock Markets Plunge as Recession Risks Grow
Wall Street on Edge: Trade War Fears Fuel Market Selloff
For the past year, U.S. policymakers have worked toward a “soft landing” — lowering inflation without triggering a recession. Now, with President Trump’s latest economic policies, markets fear a shift towards a “hard landing.”
Trump’s administration has downplayed recession risks, instead focusing on aggressive trade tariffs and major spending cuts. In an interview with Fox News, Trump defended his policies, stating, “There is a period of transition because what we’re doing is very big.” Later, speaking aboard Air Force One, he doubled down, calling tariffs “the greatest thing we’ve ever done.”
The market reaction was immediate.
- Dow Jones Industrial Average: Down 890 points (-2.1%)
- S&P 500: Fell 2.7%
- Nasdaq: Plunged 4%, its worst day since 2022
The sharp decline has erased all post-election market gains, sending shockwaves through investors.
Corporate America Braces for Economic Slowdown
Concerns over a potential recession are already rippling through the economy.
- Delta Air Lines: Slashed earnings guidance, citing a “significant shift” in consumer spending since February.
- Business Travel Demand: Companies are pulling back as economic uncertainty grows.
- Harvard University: Announced a hiring freeze as economic fears mount.
Meanwhile, JPMorgan Chase raised its recession risk estimate to 40% from 30%, citing “extreme U.S. policies.”Even Goldman Sachs, which has been optimistic on growth, increased its recession odds to 20% from 15%.
Why Are Markets Reacting So Strongly?
- Tariff Uncertainty: The administration has threatened more tariffs but hasn’t provided a clear policy roadmap.
- Government Spending Cuts: Massive job reductions in the federal workforce could slow consumer spending.
- Interest Rate Risks: The Federal Reserve may not cut rates quickly enough to cushion the economy.
Trump’s latest stance on tariffs and economic policy has alarmed investors, making markets more volatile.
Could Trump’s Policies Trigger a Recession?
Analysts are divided. Some believe this is simply a “growth scare,” while others fear a self-inflicted recession.
- Optimists argue Trump’s tariffs are a negotiating tactic to pressure China and Europe into trade concessions.
- Pessimists worry these policies could spiral into a full-blown economic slowdown, making it harder for businesses to plan investments.
What’s Next?
With markets already on edge, investors are watching closely for signs of a Fed response or a shift in Trump’s economic messaging.
As Piper Sandler’s Andy Laperriere put it:
"Instead of a weak economy forcing Trump to reconsider his policies, it’s more likely he will introduce even more disruptive economic measures."
With uncertainty at an all-time high, markets remain vulnerable to further declines.
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