(Reuters) – Asian shares posted their biggest drop in three months in August, as escalating Sino-U.S. trade tensions and fears of a global recession prompted investors to sell riskier assets.

The MSCI’s broadest index of Asia-Pacific shares, .MIAP00000PUS fell 3.4% last month, its worst decline since May.

(Graphic: Asia monthly price change Aug 2019, here)

The United States and China announced new tariffs on each other’s products in August after a brief truce.

Also, yields on 10-year U.S. Treasury notes US10YT=RR fell below the two-year yield US2YT=RR briefly, stoking further fears of a potential recession. An inverting yield curve is seen as a leading indicator of an impending economic recession.

Regional shares were also let down by a lacklustre earnings performance by Asian firms in the second quarter. Refinitiv data showed 55% of Asian firms missed their consensus earnings estimates in the June quarter.

(Graphic: Asian companies Q2 earnings miss, here)

In August, equities markets in Hong Kong .HSI plummeted 7.4% and Singapore .STI shed 5.9%, while Japan .N225 and Thailand .SETI both fell more than 3%.

All of Asia’s equities markets made losses last month.

(Graphic: Asia Pacific equities performance in 2019, here)