- Stock markets are extending a brutal selloff as investors brace for a global trade war.
- European markets fell as much as 6% in morning trading after Asia closed significantly lower.
- Commodities are falling amid recession fears and the dollar was down.
A brutal stock market sell-off intensified on Monday as investors saw few signs that US President Donald Trump would back down from his sweeping tariff plans, and foreign nations prepared to retaliate.
US stocks posted heavy losses for a third day in premarket trading. European stocks tumbled in morning trading, and Asian markets started the week deep in the red as investors fretted over the impact of Trump’s tariffs on company earnings and economies.
As of 4:45 a.m. ET, the S&P 500 was down 4.5%, the Dow Jones Industrial Average was 4% lower, and the Nasdaq 100 shed 4.1%.
Germany’s DAX fell 6.3%, Britain’s FTSE 100 slid 4.7%, France’s CAC 40 lost 5.7%, and the Euro Stoxx 600 dropped 5.6%.
The MSCI Asia Pacific Index slumped the most since the 2008 financial crisis, according to Bloomberg’s analysis.
“The impact spans economies, financial markets, supply chains, and geopolitics and will force governments, businesses, and households to retune their approach to trade relations, capital expenditure, and consumption,” wrote Eunice Tan, an S&P Global Rating credit analyst, on Monday.
Asia markets saw major losses across countries, including in China and Hong Kong, which were closed on Friday for a holiday. Shares in chip hub Taiwan — which was hit with a 32% tariff rate — tanked nearly 10% in its biggest decline on record during the first day of trading since the tariffs were announced.
Japan’s Nikkei 225 closed 7.7% lower, South Korea’s Kospi closed 5.6% lower, Hong Kong’s Hang Seng index closed 13.7% lower, China’s Shanghai Composite closed 7.3% lower, Taiwan’s TAIEX closed 9.7% lower, and Australia’s ASX 200 closed 4.2% lower.
Commodities similarly traded lower over concerns over a recession. West Texas Intermediate crude was down 3.3% at $59.94 a barrel, spot gold was trading 0.3% lower at $3,027, and the yen weakened by 0.6% against the dollar to 146.1. The US dollar index, which tracks the buck against a basket of major currencies, was down 0.5% at 102.5 points.
Cryptocurrencies were also lower with bitcoin down around the $76,000 mark and ether trading under $1,500.
Markets were already shaken after Trump unveiled higher-than-expected tariffs on Wednesday. Sentiment worsened on Friday after Beijing retaliated against Trump’s new tariffs. China said it would start charging a 34% tariff on all US imports on Thursday.
“Barring a phone call between Trump and Xi to suspend tariffs, chances are that things will probably get worse before it gets better. Markets ought to brace for more tensions even if (longer-term) hope lingers,” wrote Vishnu Varathan of Mizuho in a Monday note.
“In the meantime, needless devastation by way of collateral damage all around will be hard to avert as aggregate demand slumps accentuated by a sharp drop in demand for capital goods as uncertainty paralyzes investments,” Varathan added.
Trump said on Sunday night that he doesn’t want the stock market to crash. He said the new tariffs were necessary to rectify America’s trade deficits with other countries.
“I don’t want anything to go down, but sometimes you have to take medicine to fix something,” Trump said.
This is a developing story. Please check back for updates.
