Panic Monday: Global Markets Plunge as Trump Doubles Down on Tariffs/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ Wall Street and global markets plunged Monday after former President Trump doubled down on sweeping import tariffs. Investor fears surged over a looming recession, sending stock indexes into freefall across Asia, Europe, and the U.S. Oil prices, currencies, and futures followed suit, reflecting growing uncertainty about global economic stability.
Trump Tariffs Spark Global Sell-Off: Quick Looks
- U.S. stock futures pointed to sharp losses Monday morning.
- Asian and European markets tumbled amid rising trade war fears.
- Trump reaffirmed import tariffs of up to 50% on key goods.
- Economists warn tariffs may fuel inflation and trigger a recession.
- Major indexes flirted with bear market territory; S&P 500 off 17.4%.
- Oil prices dipped below $60 per barrel, reflecting demand concerns.
- Asian exports face major risks due to U.S. tariff dependency.
- Analysts caution prolonged market instability if tariffs persist.
Panic Monday: Global Markets Plunge as Trump Doubles Down on Tariffs
Deep Look
Global Financial Markets Nosedive After Trump’s Tariff Escalation
Wall Street braced for another tumultuous day as global markets reeled from the latest salvo in a widening trade war triggered by former President Donald Trump. On Monday, fears of an impending recession drove investors to offload risk assets, pushing stock indexes, oil prices, and currencies into chaotic territory.
In early U.S. trading, futures for the S&P 500 slid 2.7%, while the Dow Jones Industrial Average dropped 2.4%. Nasdaq futures fell nearly 3%, hinting at a brutal open following last week’s sell-off. Though some of the overnight losses were clawed back, the S&P 500 hovered near bear market territory — down 17.4% from recent highs.
This sharp downturn came on the heels of Trump’s announcement of sweeping import tariffs, ranging from 10% to 50%, targeting goods from China and other key trading partners. His decision reignited fears of a prolonged trade war, as Beijing responded with retaliatory tariffs, escalating the global economic standoff.
In a defiant statement aboard Air Force One, Trump acknowledged the market turmoil but remained unapologetic. “Sometimes you have to take medicine to fix something,” he told reporters, suggesting that short-term pain was necessary for long-term gain.
Markets across Europe and Asia echoed the U.S. panic. Tokyo’s Nikkei 225 dropped 7.8%, prompting a temporary trading halt. Hong Kong’s Hang Seng plunged 13.2%, while Shanghai’s Composite lost 7.3%. South Korea’s Kospi and Taiwan’s Taiex fell 5.6% and 9.7%, respectively. In Europe, Germany’s DAX initially dropped more than 10%, before trimming losses to 4.8%. France’s CAC 40 sank 5.1%, and the U.K.’s FTSE 100 dropped 4.9%.
Oil prices, often a proxy for global demand expectations, were not spared. U.S. crude briefly dipped below $60 a barrel — a level unseen since 2021 — before settling at $60.42. Brent crude, the international benchmark, also dropped, falling to $64.05. Analysts attribute the slump to expectations that tariffs will drag down industrial activity, softening demand for fuel.
Currency markets experienced wild swings as investors fled to safer assets. The U.S. dollar fell against the yen, trading at 146.50 from 146.94, while the euro inched up to $1.0955. The yen, traditionally a haven in uncertain times, gained traction amid the mounting chaos.
JPMorgan Chase CEO Jamie Dimon, in his annual letter to shareholders, voiced concerns over the economic impact of protectionist policies. “These tariffs will likely increase inflation and are causing many to consider a greater probability of a recession,” he wrote.
Friday’s jobs report, usually a highlight on the economic calendar, was brushed aside by investors focused on geopolitical risks. Despite strong hiring numbers, the prospect of a global downturn loomed larger.
Gary Ng, a senior economist at Nataxis, emphasized the risk to smaller economies. “Beyond the market meltdown, the bigger concern is the potential crises for small and trade-dependent economies,” he said, adding that reaching trade deals quickly could mitigate some damage.
The Federal Reserve faces pressure to act, possibly by cutting interest rates to stimulate borrowing and investment. However, Fed Chair Jerome Powell has warned that reduced rates could exacerbate inflation, especially if tariffs continue to lift prices across consumer sectors.
Nathan Thooft of Manulife Investment Management noted that retaliatory tariffs from other nations could drag negotiations for months, prolonging uncertainty. “Volatility is likely to persist for some time,” he said.
Stuart Kaiser of Citi echoed that sentiment, cautioning that current earnings estimates may not reflect the full impact of the trade war. “There is ample space to the downside despite the large pullback,” he wrote in a client note.
Investors now find themselves at a crossroads — torn between hopes of a diplomatic breakthrough and fears of a drawn-out standoff that could send the global economy spiraling into recession. All eyes will remain on trade developments and monetary policy signals in the weeks ahead.
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