Global financial markets witnessed a steep sell-off on Monday following US President Donald Trump’s announcement of sweeping tariffs, fuelling fears of a worldwide economic slowdown. Wall Street mirrored the global trend, with the Dow Jones Industrial Average plunging by 1,200 points and the Nasdaq composite declining by 4 per cent, according to the Associated Press. The S&P 500 dropped 3.8 per cent in early trading, marking its worst performance since the COVID-19 pandemic began in March 2020.
Since April 2, markets have been inching towards bear territory. In the two days following the tariff announcement, over $5 trillion in value was wiped off US stocks. Japan’s Nikkei index fell nearly 8 per cent, while European stocks tumbled by 6 per cent. The VIX volatility index also recorded its highest level since August 2024.
According to Reuters, investors fear that the US Federal Reserve may be compelled to reduce interest rates as early as May, citing rising risks of a recession.
JPMorgan Chase CEO Jamie Dimon warned that the Trump administration’s trade policies are likely to drive up prices for both imported and domestic goods and services, adding strain to an already slowing US economy.
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