Dropping Forecast for China's Stock Exchange Market
Wall Street Sell-Off Continues, Asian Markets Brace for Impact
The stock market in China has experienced consecutive losses, with the Shanghai Composite Index (SCI) sinking more than 55 points or 1.7 percent on Friday. This downward trend may continue on Monday, as the SCI is currently just shy of the 3,560-point plateau.
The sell-off on Wall Street also occurred on Friday, with all major averages opening sharply lower and remaining deep in the red throughout the session. The Dow Jones Industrial Average tumbled 542.42 points or 1.23 percent to finish at 43,588.58. The S&P 500 dropped 101.38 points or 1.60 percent to end at 6,238.01, while the NASDAQ Composite tanked 472.27 points or 2.24 percent to close at 20,650.13.
The lead from Wall Street is brutal, and the European and U.S. markets were sharply lower. The Asian bourses are expected to follow that lead, as the global forecast for the Asian markets is broadly negative due to new U.S. tariffs and a weak American jobs report.
The new tariffs were announced by the White House on Friday, with a 40 percent levy to be imposed on goods that have been transshipped to evade applicable duties. These tariffs have been a source of concern for investors, as they could potentially lead to reduced consumption and lower earnings for companies in various sectors.
Crude oil prices also fell on Friday due to demand concerns for potentially reduced consumption amid new U.S. tariffs. West Texas Intermediate crude for September delivery was down $1.92 or 2.77 percent at $67.34 per barrel.
In Asia, the reciprocal tariffs listed for several countries (e.g., Indonesia, Japan, Kazakhstan) were delayed but became effective around late July 2025, possibly influencing trade flows with the U.S. While direct data on the Shanghai Composite Index impact is not available, typical market reactions to heightened U.S.-Asia trade tensions and tariff escalations tend to involve increased volatility and downward pressure on equities due to concerns over export disruptions, reduced earnings, and economic growth uncertainty.
Among the actives in the SCI, Industrial and Commercial Bank of China improved 0.79 percent, Agricultural Bank of China collected 0.48 percent, China Merchants Bank eased 0.13 percent, Bank of Communications slipped 0.52 percent, China Life Insurance slumped 0.44 percent, Jiangxi Copper rose 0.36 percent, Aluminum Corp of China (Chalco) slipped 0.54 percent, Yankuang Energy added 0.55 percent, PetroChina plunged 4.06 percent, China Petroleum and Chemical (Sinopec) plummeted 5.32 percent, Huaneng Power lost 0.55 percent, China Shenhua Energy retreated 1.57 percent, Gemdale shed 0.53 percent, Poly Developments fell 0.38 percent, China Vanke sank 0.78 percent, Bank of China was unchanged.
The new U.S. tariffs imposed in 2025 have contributed to economic headwinds in the U.S. and likely triggered reciprocal trade measures in Asia, including China. This creates an environment of uncertainty that generally negatively affects Asian markets such as the Shanghai Composite Index, though no explicit index performance data is present in the current sources.
[1] Source: Economic Policy Institute [2] Source: U.S. International Trade Commission
- As the sell-off on Wall Street and worldwide markets continue, investors are closely watching the financial and business implications of the new U.S. tariffs, particularly those affecting Asia, as they may impact exports, earnings, and economic growth in these regions.
- In light of the anticipated pressure on Asian businesses due to ongoing trade tensions and tariffs, some investors might consider diversifying their investments to hedge against potential losses, seeking opportunities in sectors that are less susceptible to these geopolitical influences.
