Wall Street points to great losses on Monday, after huge decreases last week, since fears increase that US tariffs announced by President Donald Trump will slow down world economic growth.
Petroleum prices sank again, submerging briefly below US60 ($ 98) per barrel for the first time since 2021, with more investors anticipating that a commercial war will cool world economic growth.
Futures for the S&P 500 fell 2.7 percent in trade prior to trade on Monday, while futures for the industrial average Dow Jones fell 2.4 percent. Nasdaq’s futures fell 3 percent. The three indexes recovered some of their losses during the night, when the S&P 500 was heading towards the territory of the bearish market, defined as a fall of more than 20 percent from the peak. The index was out of 17.4 percent at the end of last week.
The mass sale in more risky assets at the beginning of the negotiation week follows the Trump announcement of taxes and retaliations of the US importation of China that saw that the markets abruptly fell on Thursdays and Fridays.
Trump’s tariff strategy has been criticized for a long time by economists, investors and business leaders, who fear that the isolation of the United States severely limits economic growth.
“Recent tariffs will probably increase inflation and are causing many to consider a greater probability of a recession,” wrote the JPMorgan CEO, Jamie Dimon, in his annual letter to the shareholders on Monday. “If the tariff menu causes a recession or not in question, but will reduce growth.”
Tokyo’s Nikkei 225 index lost almost 8 percent shortly after the market opened and the futures trade due to the reference point was briefly suspended. Closed 7.8 percent to 31,136.58.
European actions followed the lowest Asian markets, led by the Dax index of Germany, which briefly fell more than 10 percent outdoors in Frankfurt’s exchange, but recovered some land to lower 4.8 percent in noon operations. In Paris, CAC 40 threw 5.1 percent, while Great Britain FTSE lost 4.9 percent.
On Friday, the worst market crisis since the Covid-19 pandemic changed to a higher march since the S&P 500 collapsed 6 percent and the Dow fell 5.5 percent. The Nasdaq compound fell 3.8 percent.
“There is still no sign that the markets find a fund and begin to stabilize,” wrote Deutsche Bank analysts in a research note.
On Sunday afternoon, Trump reiterated his resolution on his decision to introduce tariffs of 10 percent to 50 percent in imported goods to the United States, a movement seen as a massive interruption of world trade and supply chains through borders. Speaking to journalists aboard Air Force One, he said he did not want global markets to fall, but also that he was not worried about mass settlements, he added: “Sometimes you have to take medications to fix something.”
Trump published in his social site in Truth on early Monday, blaming China and other “abuse countries” for retaliation against the United States with additional tariffs.
The heavy sales entries after China on Friday matched Trump’s rate, increasing bets in a commercial war that many fear could end in a global recession. Even a better report than expected on the US labor market. Uu., In general, the highlight of each month was not enough to stop the slide.
“The idea that there is so much uncertainty in the future about how these rates will develop, that is what this pen is really promoting in the prices of actions,” said Rintaro Nishimura, an associate in the Asia group.
Chinese markets often do not follow global trends, but they have also fallen. Hang Seng from Hong Kong fell 13.2 percent to 19,828.30, while the Shanghai compound index lost 7.3 percent to 3096.58. In Taiwan, Taiex collapsed 9.7 percent.
Asian economies are strongly exposed to Trump’s tariffs, since they depend on exports, and a great participation goes to the United States.
“Beyond the market collapse, the greatest concern is the potential impact and crises for small and dependent economies, so it is crucial to see if Trump will reach agreements with most countries soon, at least partially,” said Gary Ng of Nataxis.
The American reference crude fell $ 1.57 to $ 60.42 per barrel. Brent Crude, the international standard, gave $ 1.53 to $ 64.05 per barrel. As with mass sale, the fall was fed by fears that tariffs would slow down economic growth. That would affect the demand for fuel, and the fall occurs after the movements to increase the production of the alliance of the OPEC+producers.
Exchange rates also turned. The US dollar fell to 146.50 Japanese yen from 146,94 yen. Yen often looks like a safe shelter in times of agitation. The euro increased to $ 1,0955.
Nathan Thooft, investment director and manager of Senior portfolio of Manulife Investment Management, said it is likely that more countries respond to the United States with retaliation rates. Given the large number of countries involved, “it will take a considerable amount of time to our opinion to overcome the various negotiations that will probably happen.”
“Ultimately, our shot is the uncertainty of the market and they are likely to persist for some time,” he said.
The Federal Reserve could cushion the coup of tariffs on the economy of the United States by reducing interest rates. That can encourage companies and homes to borrow and spend. But the president of the Fed, Jerome Powell, said Friday that the highest tariffs could increase inflation expectations and that the lowest rates could further feed more price increases.
Much will depend on how long Trump’s rates stay and how other countries react. Some investors hope that tariffs decrease after negotiating “victories” from other countries.
Stuart Kaiser, head of the American capital strategy in Citi, wrote in a note to customers that profits and actions of shares do not still reflect the potential impact of the commercial war. “There is ample space in the inconvenience despite the great setback,” he said.
