Global financial markets were shaken and sparked recession fears as US President Donald Trump's 10 per cent baseline reciprocal tariffs on countries came into effect on April 5. Dow Jones stock market index of the United States led Wall Street to log its worst day in four years, since the Covid pandemic plunge.
Donald Trump on April 2 announced his reciprocal tariff plan, with a baseline tax of 10 per cent on goods coming to US from other countries and varying additional charges over and above it.
Global stock market crash | Key points
Dow Jones: In the US, the Dow Jones Industrial Average dropped over 5.5 per cent, while the S&P 500 and the Nasdaq fell by similar margins. The reciprocal tariffs announced by Donald Trump have raised concerns about rising costs, supply chain disruptions, and inflation.
S&P, Nasdaq: The economic risks posed by US President Donald Trump’s trade war, including China’s retaliatory measures, led to the S&P 500 enduring its steepest two-day drop since March 2020, with a selloff that wiped out more than $5 trillion in market value, falling six per cent on Friday alone. Meanwhile, the Nasdaq 100 entered a bear market. Treasury yields for the 10-year note fell by three basis points to 3.99 per cent, while the dollar gained one per cent.
– Some of the main moves in markets (Bloomberg info):
Stocks
- The S&P 500 fell 6% as of 4 pm New York time
- The Nasdaq 100 fell 6.1%
- The Dow Jones Industrial Average fell 5.5%
- The MSCI World Index fell 6%
Currencies
- The Bloomberg Dollar Spot Index rose 1%
- The euro fell 1% to $1.0944
- The British pound fell 1.7% to $1.2876
- The Japanese yen fell 0.6% to 146.95 per dollar
Cryptocurrencies
- Bitcoin rose 2.1% to $84,024.64
- Ether rose 0.8% to $1,811.63
– UK markets see affect: The impact of the tariffs went beyond the US borders, affecting markets in the UK and Europe. The FTSE 100 in London fell by 1.8 per cent, with key sectors like technology, manufacturing, and energy taking the hardest hits. European markets also showed similar trends, with Germany's DAX index dipping 2.3 per cent, and France’s CAC 40 falling 1.6 per cent.
{{/usCountry}}– UK markets see affect: The impact of the tariffs went beyond the US borders, affecting markets in the UK and Europe. The FTSE 100 in London fell by 1.8 per cent, with key sectors like technology, manufacturing, and energy taking the hardest hits. European markets also showed similar trends, with Germany's DAX index dipping 2.3 per cent, and France’s CAC 40 falling 1.6 per cent.
{{/usCountry}}– UK PM speaks to world leaders: As UK’s FTSE 100 suffered its worst day since the start of the pandemic, Prime Minister Keir Starmer agreed that “like-minded countries must maintain strong relationships” in the wake of Donald Trump’s reciprocal tariffs. The UK PM spoke to the leaders of Australia and Italy on Friday – the first in a series of calls expected with world leaders over the weekend as country reel from the economic hit.
– JPMorgan predicts recession: JPMorgan Chase & Co. predicted that the United States economy will enter a recession this year, largely due to the impact of new tariffs announced by President Donald Trump, reported The Hill. In a note to investors released on Friday evening, JP Morgan's chief US economist, Michael Feroli, said the country's gross domestic product (GDP) is expected to contract “under the weight of the tariffs”.
– China says market has spoken: China said on Saturday "the market has spoken" in rejecting US President Donald Trump's tariffs, and called on Washington for "equal-footed consultation" after global markets' dramatic reaction to the trade levies, which drew Chinese retaliation. "The market has spoken," Chinese foreign ministry spokesperson Guo Jiakun said in a post on Facebook Saturday morning.
– ‘Get rich’, says Trump: US President Donald Trump taunted China on Friday after the US's top economic rival retaliated against his tariffs, dismissing the resulting stock market declines amid the escalating global trade war. He framed the situation as an opportunity to “get rich.” "China played it wrong, they panicked — the one thing they cannot afford to do!" Trump wrote on Truth Social, using his signature all-caps style. "This is a great time to get rich," he said in another post.