Global stock markets plunged on Monday, with Asian stocks leading the rout, after US President Donald Trump said tariffs would cover all countries. This sparked fears of a global trade war that could lead to a recession.
The Nikkei 225 in Japan fell 4.1% to its lowest level in six months, while MSCI’s Asia-Pacific shares outside Japan shed 1.9%. South Korea’s stocks also dropped 3.0%.
Investors are seeking safe havens, driving up demand for sovereign bonds and the Japanese yen, as well as lifting gold prices to a record high. The S&P 500 futures lost 0.8%, while Nasdaq futures fell 1.4%.
European Union leaders were prepared to retaliate with tariffs, but also reported plans to offer concessions to Trump. German Chancellor Olaf Scholz said on Sunday that the EU was ready to respond.
Economists warn of a heightened risk of recession due to aggressive US policies and the impact on business and household sentiment. The Federal Reserve is expected to cut rates to cushion the blow, but analysts now see a 35% chance of a US recession, up from 20%.
Bond investors are betting on a slowdown in US economic growth outweighing inflation, leading to lower interest rates. This has seen 10-year Treasury yields drop to 4.206%, while two-year yields hit 3.861%. The perceived safety of gold also drove prices to a record high at $3,111 an ounce.
Oil prices fell 30 cents to $73.33 a barrel, as Trump’s comments on imposing tariffs on Russian oil offset concerns about the impact on global growth.
Source: https://www.reuters.com/markets/global-markets-wrapup-1-2025-03-31