Investors returned from the expectations of a serious economic decline caused by the increasing trade war and financial markets around the world were multiplied on Monday.
Trade in Asia has changed extremely throughout the day. Among the harsh strokes among the markets, Hong Kong, where stocks fell 13 percent and Taiwan fell 10 percent. Stocks in the Chinese mainland fell by 7 percent.
Stocks in Europe also fell throughout the board of directors and the Criterion Pan-European index fell more than 5 percent.
The S&P 500 has been prepared to open sharply lower than futures. If this loss would continue during the process of trading in New York, the index may enter a bear market – a 20 percent or more decrease from the last summit. The index fell 17.4 percent from the summit in February on Friday.
Analysts in Deutsche Bank wrote in a note that “there is no sign that markets are starting to find a foot and balancing.”
Hoping that the Trump administration would soften the tariffs imposed on America’s major trade partners, the fears of the global sprinkle from the trade war intensified.
On Sunday evening, President Trump doubled and said he would not ease his tariffs in other countries unless he pays us a lot of money ”. “Sometimes you need to take medicine to correct something,” he said, when the Air Force One asked journalists about the fears of market turmoil and stagnation.
On Friday, China returned to the United States with a 34 percent tariff in a number of American exports, and Mr Trump matched a 34 percent tariff imposed on Chinese goods last week. China’s taxes will enter into force late this week shortly after the implementation of the “mutual” tariffs of Trump administration in dozens of countries. On Saturday, the 10 percent “base line” tariff on almost all goods coming to the United States entered into force.
During the weekend, analysts said that Asia could be particularly vulnerable to retaliation tariffs between China and the United States. Many countries in the region, including Japan and South Korea, count both countries as the best trade partners.
The comparison indices in South Korea fell by about 5 percent, while Australia fell more than 4 percent. The decreases in Japan were so sharp that the country’s stock market operator briefly stopped trade in the future of Japanese stock on Monday morning. The country’s Nikkei 225 index closed more than 7 percent.
Technology stocks in Asia were blocked. Taiwan semiconductor production company, the world’s largest chip manufacturer, fell by about 10 percent, while Apple’s main contract manufacturer Foxconn fell by 10 percent. In Hong Kong, Chinese technology giants Alibaba, Terment and Xiaomi all fell with double -digit percentages.
The best -selling key video game console postponed the pre -orders for the continuation of the tariffs referring to the Nintendo of Japan fell more than 7 percent.
No industry in Europe has not escaped from sales. As the fear of a general economic slowdown and the fear of freezing in the construction of the agreement continued, banks were particularly forced. Both of the shares in Germany’s Deutsche Bank and Britain’s Barclays fell more than 7 percent.
The shares in the defense companies also fell and no longer supported the promises of European governments to increase military expenditures. Germany’s shares in Rheinmetall fell by 11 percent and Italy’s shares in Leonardo fell by 9 percent.
Investors turned into relative security of government bonds and provided prices higher and lower. Germany’s 10 -year bond returns fell one -tenth of the 2.48 percent of the bond market, which is a major move. USA 10 -year Treasury returns are below 4 percent.
Prices in oil markets fell by about 4 percent and contributed to steep losses last week. And the price of the copper, which is considered a wide economic indicator, was about 2 percent.
The S&P 500, which allowed investors to bet on the index before the official start of trade in New York on Monday, filed 4 percent on Monday morning.
On Thursday and Friday, the 10.5 percent decrease in S&P 500 has been the worst two -day decline for the index since the beginning of the Coronavirus pandemi in 2020.
According to S&P Dow Jones Indices Senior Index Analyst Howard Silverblatt, the only example of a two -day worse decline came during the 2008 financial crisis and 1987 stock market accident. In terms of dollars, more than $ 5 trillion deleted in the value of S&P within two days last week.
Even more unusual, the sale of last week is the direct presidential policy.
Historically high tariffs announced by Mr. Trump on Wednesday increased economic forecasts by capturing investors, economists and businessmen.
Chief managers began to warn consumers that they should expect prices to increase in some food, clothes and other products. Consumers said that they plan to restrain spending on large ticket goods. Some automobile companies have already announced their job losses at home as well as production pauses abroad. In the next 12 months, bank economists have increased the likelihood of a stagnation to be hit by the United States. As countries responded with their own tariffs last week, sales in financial markets accelerated.
Hedge Fund Manager Bill Ackman said that he supported Mr. Trump’s attempt to correct global tariffs at the Social Media Platform on Sunday, but on Monday, he said to call the “90 -day time -out”.
Otherwise, we are going to a, economic nuclear winter that is connected to it, and we should start going down, ”he said. “Cooling heads may prevail.”
British Prime Minister Keir Starmer called on Saturday that the world we know is going ”and countries not to retaliate against the United States and not to enter a complete trade war.
The Nasdaq Composite Index, which was full of technology stocks that came under pressure last week, is in a bear market, almost 23 percent of the December summit. The Russell 2000 index, which is more sensitive to the appearance of the economy, fell more than 25 percent of the November summit. Futures suggest that both directors will continue to sink on Monday.
Treasury Secretary Scott Bessent said he did not see a reason for waiting for a stagnation about the NBC program on Sunday.
However, analysts warned how high the tariffs to the economy will depend on how high tariffs.
“We are very cautious,” said Stuart Kaiser, a stock analyst in Citi. Even with the decrease of last week, he said that the markets may need to fall further because the gains and economic growth expectations “are far above the consistent levels with the described tariff levels”.
Tony Romm Reporting contributed.
