Market Turmoil Continues Amid Trump’s Tariff Threats: U.S. Stocks, Crypto, and Global Markets Tumble
U.S. stock markets experienced another tumultuous day on Monday, as volatility reached new heights amid mixed signals surrounding President Donald Trump’s ongoing tariff disputes. The day saw sharp losses, only to be followed by brief recoveries, before ultimately ending in further declines.
U.S. Stocks Drop Amid Tariff Tensions
The Dow Jones Industrial Average plunged by 800 points, or 2%, marking a significant downturn. Meanwhile, the tech-heavy Nasdaq fell by 1.3%, and the S&P 500 saw a decline of 1.7%. The market initially dropped steeply at the start of trading, only to recover briefly before again turning lower.
Trump’s remarks on social media, where he claimed that “tough but fair parameters” are being set, initially sparked optimism. However, the mood quickly soured after the President threatened to impose a 50% tariff on China unless the country withdraws the 34% retaliatory tariffs it announced last week. This warning came after a 34% U.S. tariff was imposed on China, adding to an already-existing 20% tariff, pushing total U.S. tariffs on Chinese goods to a staggering 104%.
Global Market Volatility Driven by Uncertainty
This uncertainty surrounding tariff negotiations has sent shockwaves across the global markets, fueling erratic trading patterns. Bret Kenwell, a U.S. investment analyst at eToro, highlighted the immense volatility, attributing it to the unclear future of U.S.-China trade relations. “It’s an immense amount of volatility at the moment amid an immense amount of uncertainty,” he told ABC News.
Market analyst Ivan Feinseth from Tigress Financial echoed this sentiment, emphasizing the potential risks these tariffs pose to economic growth. “These tariffs could slow growth, increase inflation, and put the Federal Reserve on hold,” he noted, adding that the market’s brief recovery indicated investors’ eagerness for a resolution to global trade tensions.
Crypto Market Hit Hard
The volatility wasn’t limited to traditional stocks; the cryptocurrency market also felt the heat. Bitcoin, the world’s largest cryptocurrency, saw a 0.9% decline, dropping to around $79,000, marking a 30% decrease from its peak in January. Ether fell by 3.4%, while Solana, a lesser-known cryptocurrency, dropped 1.1%.
Asia Struggles with Sharp Declines
The sell-off extended beyond U.S. borders, hitting global markets hard, especially in Asia. Japan’s Nikkei 225 index plummeted nearly 9%, triggering a circuit breaker that temporarily halted trading. In Taiwan, the Taiex dropped 9.7%, while Singapore’s STI fell more than 8%. South Korea’s KOSPI index also saw a significant loss of over 5.5%.
However, Hong Kong’s Hang Seng Index suffered the most, plunging 13.22%, marking its worst one-day performance since the 1997 Asian Financial Crisis. Chinese tech stocks like Alibaba and Baidu took heavy losses during the sell-off.
Europe Joins the Downward Trend
European markets weren’t spared either. The UK’s FTSE 100 index dropped 6% at the opening bell, while the pan-European Stoxx 600 fell by more than 6%. Germany’s DAX index sank 10%, France’s CAC lost 6.6%, and Italy’s FTSE MIB dropped 5.7%.
U.S. Investors Brace for Continued Losses
As market turmoil spreads, U.S. investors brace for more volatility, with many fearing the long-term impacts of Trump’s “Liberation Day” tariffs. On Sunday, Trump addressed the market turbulence, attempting to downplay concerns of an impending recession.
“I can’t tell you what’s going to happen with the market, but I can tell you our country has gotten a lot stronger,” Trump said, adding that “eventually, it’ll be the most dominant country economically in the world.” The President’s remarks, however, did little to calm investor nerves as the market continued its downward trajectory.
A Historic Week for U.S. Stocks
The turbulent trading session on Friday marked the worst day for U.S. stocks since 2020, with the Dow Jones falling by 2,230 points, or 5.5%. The S&P 500 plunged 6%, and the Nasdaq declined by 5.8%, officially entering bear market territory. The losses have contributed to a volatile week that saw the second-worst trading day for U.S. stocks since 2020.
Looking Ahead: Uncertainty Looms
As markets continue to react to the ongoing trade dispute and tariff uncertainty, global investors remain on edge. With no clear resolution in sight, the coming weeks could see even more significant volatility, as both investors and governments grapple with the economic fallout from escalating trade tensions.
