The Indonesia Stock Exchange (IDX) Composite index suffered a dramatic 9.2 percent drop to 5,912 points shortly after opening at 9 a.m. on Tuesday, April 9, 2025, prompting an automatic 30-minute trading halt. By 10:30 a.m., the index had clawed back slightly to 5,971 points, narrowing the daily loss to 8.31 percent. The sharp decline, delayed by an 11-day holiday closure for Nyepi and Idul Fitri, reflects a broader wave of market turbulence across Asia and beyond, driven by fears of escalating US import tariffs under President Donald Trump’s latest policy announcements.
Global Shockwaves Hit Asian Markets
The catalyst for this market upheaval traces back to the United States, where President Trump’s recent threat to impose higher tariffs on imports, particularly targeting China, has rattled investors worldwide. In just two days following the announcement, US markets shed a staggering US$6.6 trillion in value. The Nasdaq plummeted 11.4 percent, the S&P 500 fell 10.5 percent, and the Dow Jones Industrial Average dropped 9.3 percent. While a semblance of stability returned on Monday, with the Nasdaq edging up 0.1 percent and smaller declines in the S&P 500 and Dow Jones at 0.23 percent and 0.91 percent respectively, the initial shockwave has reverberated across global financial hubs. 
Asia has not been spared. Hong Kong’s Hang Seng Index nosedived 14.5 percent, Japan’s Nikkei 225 shed 12.8 percent, and China’s Shanghai Composite slipped 7.6 percent, with the bulk of these losses recorded on Monday. A mild recovery emerged on Tuesday morning, as these indexes rose by 2 percent, 6.08 percent, and 0.78 percent respectively. Yet, the overarching sentiment remains one of uncertainty, with analysts warning that the full impact of the proposed tariffs—potentially dampening global economic growth and squeezing corporate profits—may not yet be fully priced into markets.
Indonesia’s Delayed Reaction
For Indonesia, the timing of the market rout was delayed due to the extended holiday closure of the IDX. While this temporarily shielded the local bourse from the initial global sell-off, analysts had long cautioned that Jakarta would not remain immune. Their predictions proved accurate as trading resumed on Tuesday, with the IDX Composite index taking a significant hit. The scale of the drop—9.2 percent at opening—underscored the interconnectedness of global markets and the vulnerability of emerging economies like Indonesia to external policy shifts.
The IDX had anticipated such volatility, revising its circuit breaker rules just before trading resumed. Originally introduced during the COVID-19 crisis, these rules are designed to curb panic selling by halting trading during extreme declines. The threshold for the first 30-minute halt was widened from a 5 percent drop to 8 percent, while a second pause is now triggered at a 15 percent loss, up from the previous 10 percent. A 20 percent plunge could lead to a full-day suspension. Additionally, the bourse tightened its auto-rejection lower bound (ARB)—the limit on how far a stock can fall in a single day—to 15 percent across all stocks, a significant reduction from the previous limits of up to 35 percent for lower-priced shares and 25 to 20 percent for higher-priced ones.
“These measures were taken to manage market volatility and safeguard investors” said IDX corporate secretary Kautsar Primadi Nurahmad in a statement on Tuesday. “The revised trading halt scheme also provides more room for liquidity, allowing investors time to reassess their strategies based on the latest public information.”
Economic Implications for Indonesia
The sharp decline in the IDX Composite index raises pressing questions about the broader economic implications for Indonesia, Southeast Asia’s largest economy. The country has been navigating a delicate balance between domestic growth and external pressures, with exports playing a critical role in its economic framework. The prospect of higher US tariffs, particularly if expanded beyond China to other trading partners, could disrupt Indonesia’s export-driven sectors such as textiles, electronics, and palm oil. These industries are already grappling with fluctuating commodity prices and supply chain disruptions lingering from the post-pandemic recovery.
Analysts note that Indonesia’s economic resilience will depend on several factors, including the government’s ability to stimulate domestic demand and diversify trade partnerships. While the country has made strides in strengthening ties with other Asian economies through frameworks like the Regional Comprehensive Economic Partnership (RCEP), a prolonged downturn in global trade could still pose significant challenges. Moreover, foreign investors, who hold a substantial share of IDX-listed stocks, may continue to pull capital from emerging markets if US policy uncertainty persists, further pressuring the local bourse.
Investor Sentiment and Market Volatility
Beyond the immediate numbers, the mood among investors in Jakarta is one of cautious apprehension. Many had hoped that the holiday closure might allow global markets to stabilize before the IDX reopened, but Tuesday’s plunge dashed those expectations. Social media platforms, including posts on X, reflect a mix of frustration and pragmatism among Indonesian retail investors, with some questioning the effectiveness of the revised circuit breaker rules in truly curbing panic. Others see the trading halts as a necessary buffer, giving the market breathing room to absorb the latest developments.
Globally, the tariff fears have reignited debates about the fragility of interconnected financial systems. For Indonesia, the current volatility is a stark reminder of the challenges facing emerging markets in a world where policy decisions in Washington can trigger cascading effects thousands of miles away. While the IDX’s updated rules aim to mitigate short-term shocks, they cannot address the underlying causes of investor unease—namely, the uncertainty surrounding the scope and duration of the proposed US tariffs.
Regional Context and Comparative Analysis
Indonesia’s market reaction must also be viewed in the context of its regional peers. Hong Kong, Japan, and China, with their deeper integration into global supply chains, experienced more immediate and severe declines following the US tariff announcement. In contrast, Indonesia’s delayed response—due to the holiday closure—may have allowed some investors to prepare for the inevitable. However, the scale of the IDX’s drop on Tuesday suggests that preparation could only go so far in cushioning the blow.
Comparatively, other Southeast Asian markets have shown mixed responses. Singapore’s Straits Times Index, often seen as a regional bellwether, recorded a more moderate decline of around 5 percent over the same period, reflecting its status as a financial hub with diversified exposure. Meanwhile, markets in Thailand and Malaysia have also faced downward pressure, though not to the same extent as Indonesia or Hong Kong. This disparity highlights the varying degrees of vulnerability among Asian economies to external shocks, with export-heavy nations like Indonesia bearing a heavier burden.
Looking Ahead: Policy Responses and Recovery Prospects
As the dust settles on Tuesday’s dramatic market movements, attention now turns to how Indonesian authorities and the IDX will respond to sustained volatility. The revised circuit breaker and ARB rules are a start, but they are reactive measures rather than proactive solutions. Economists suggest that the government may need to consider additional fiscal or monetary interventions—such as targeted stimulus for key industries or incentives for foreign investment—to bolster confidence in the local market.
At the same time, the global picture remains fluid. If US tariffs are implemented as threatened, they could reshape trade dynamics across Asia, potentially accelerating a shift toward regional self-reliance. For Indonesia, this could mean doubling down on domestic manufacturing and reducing dependence on volatile export markets. Yet, such transitions take time, and in the interim, both policymakers and investors face an uphill battle to navigate the current storm.
As markets across the region brace for further developments, the coming days will be critical in determining whether Tuesday’s plunge marks the beginning of a deeper downturn or a temporary setback. For now, Jakarta’s financial district remains on edge, with investors and analysts alike watching closely for signs of stability—or further turbulence—on the horizon.
