Global stocks extended a severe plunge on Monday amid concerns that U.S. tariffs would lead to a global economic slowdown.
Stocks in Europe and Asia have caused huge losses, with leading U.S. indexes flirting with bear territory in bear trading, and oil prices have fallen.
President Donald Trump announced a sharp increase in U.S. import taxes and retaliation, a massive amount of sold out of this huge risk asset, amid U.S. import taxes and retaliation that announced a sharp decline in the market on Thursday and Friday.
Shortly after the market opened, Tokyo's Nikkei 225 index lost nearly 8%, while benchmark futures trading was temporarily suspended. It closed 7.8% at 31,136.58.
European stocks followed the Asian market, led by Germany's DAX index, which briefly fell more than 10% in the Frankfurt Exchange Open, but recovered some base in morning trading, down 5.8%.
In Paris, CAC 40 points fell by 5.8%, while UK's FTSE 100 lost 4.9% in the mornings in Europe.
Futures in the United States show further weakness.
For the S&P 500, they lost 3.4%, while the Dow Jones industrial average lost 3.1%. Nasdaq lost 5.3%. If losses in former market futures will be realized when the U.S. market is open, the S&P 500 will enter bear territory, defined as being more than 20% away from the peak. As of last weekend, the index's revenue was 17.4%.
On Friday, the worst market crisis turned into higher gears since the 19-year-old pandemic, as the S&P 500 fell 6% and the Dow fell 5.5%.
Nasdaq Composite fell 3.8%.
“There is no sign that the market is finding the bottom and starting to stabilize,” Deutsche Bank analysts wrote in a research note.
Trump believes turmoil is “medical”
Later on Sunday, Trump reiterated his decision to tariffs on goods imported to the United States, a move seen as a massive disruption of world trade and cross-border supply chains.
He said he didn’t want to let the global market fall, but he wasn’t worried about a lot of short selling, adding: “Sometimes you have to take medication to solve the problem.”
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After China matched Trump’s tariffs on Friday, massive sales began, raising stakes in a trade war, with many fears ending in a global recession.
Even expected reports about the U.S. job market, often the economic highlight each month, aren't enough to stop the slideshow.
“The uncertainty about how these tariffs will play out is what really drives the share price down,” said Rintaro Nishimura, partner at Asia Group.
The Chinese markets usually don’t follow global trends, but they also fall.
Hong Kong's Hang Seng fell 13.2% to 19,828.30, while the Shanghai Composite Index lost 7.3% to 3,096.58. In Taiwan, Taiex plummeted 9.7%.
South Korea lost 5.6% to 2,328.20, while Australia's S&P 200 lost 4.2% to 7,343.30, recovering from the odds of losing more than 6%.
Asian economies have been greatly exposed to Trump’s tariffs because they rely on exports and have a large share transferred to the United States.
“Besides the market crash, the greater concern is the impact and potential crisis on small and trade-dependent economies, so at least partly see whether Trump will reach a deal with most countries as soon as possible,” said Nataxis’ Gary Ng.
Oil prices also fell further, with our benchmark crude falling $2.30 to $59.69 a barrel. International standard Brent Intrude abandoned $2.33 to $63.25 a barrel.
Like the larger sell-off, there are concerns that tariffs will slow economic growth.
This will trigger demand for fuel, and the decline is a decline following a move to increase production from the OPEC+ producer alliance.
Exchange rates also echo. The US dollar fell from 146.94 yen to 146.24 yen. The yen is often seen as a safe haven in turbulent times. The euro rose 0.3% to $1.0992.
Nathan Thooft, chief investment officer and senior portfolio manager at Manulife Investment Management, said a growing number of countries could respond to the U.S. with retaliatory tariffs.
Given the large number of countries involved, “it seems to us that it will take a lot of time to work through the various negotiations that may occur.”
“Ultimately, our view is that the market is uncertain and volatility may continue for a while,” he said.
The Fed can reduce the impact of tariffs on the U.S. economy by lowering interest rates.
This can encourage corporate and households to borrow and spend.
But Fed Chairman Jerome Powell said Friday that higher tariffs could raise expectations of inflation, while lower interest rates could increase price gains.
Much depends on how long Trump's tariffs last and how other countries react. Some investors insist on hope that he will lower tariffs after negotiating “victories” in other countries.
Earnings estimates and stock value still do not reflect the full potential impact of the trade war, Stuart Kaiser, head of U.S. equity strategy at Citi, wrote in a notice.
“Although there is a big callback, there is plenty of room for space,” he said.
Kurtenbach reported on Bangkok. Associated Press writers Ayaka McGill, Paul Harloff and Jiang Junzhe contributed.
