Turmoil in global markets snowballed into one of the worst routs in recent memory after President Trump said he will stay the course with aggressive, economically disruptive tariffs.
"What's going to happen to the markets, I can't tell you," Trump said late Sunday. "I don't want anything to go down. But sometimes you have to take medicine to fix something."
Stock futures tumbled early Monday, with contracts tied to the major U.S. indexes recently down more than 3%. The pullback suggested the broad S&P 500 index was at risk of following the tech-heavy Nasdaq Composite into a bear market, often defined as following a 20%-plus decline from a recent peak.
Wall Street's "fear gauge," the VIX, leapt to levels reminiscent of the Covid-19 meltdown and the global financial crisis, as investors braced for volatility ahead.
Global markets recoiled. In Asia, where many economies are highly trade-reliant, stocks plunged. Hong Kong's main equity benchmark crashed 13%, in its worst day since the Asian financial crisis. Indexes in Shanghai, Taipei and Tokyo fell between 7% and 10%.
The selloff didn't spare Europe, where the Stoxx Europe 600 sank 5%. Bitcoin and oil prices fell sharply.
Treasurys rallied, pushing down yields, as investors bet the Federal Reserve will need to slash interest rates. Futures prices, likewise, showed traders now see a more than 50% likelihood of the equivalent of five or more quarter-point rate cuts this year.
U.S. stocks lost $6.6 trillion in value during a two-day washout last week after President Trump announced larger tariffs than Wall Street expected and China said it would match the duties on all U.S.-made goods.
Here's what else you need to know:
--Israeli Prime Minister Benjamin Netanyahu is set to be the first world leader to hold in-person talks with Trump about the tariffs. U.S. officials said more than 50 countries had reached out to start negotiations.
--The Chinese Communist Party's flagship newspaper said Chinese policymakers were well-prepared to cope with U.S. tariffs by using policy tools including monetary and fiscal easing.
--Billionaire investor Bill Ackman called for a 90-day pause on the implementation of the tariffs, saying they are a mistake.
--Trump urged Americans to stay the course, promising in a social-media post that "it won't be easy, but the end result will be historic."
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(END) Dow Jones Newswires
April 07, 2025 06:28 ET (10:28 GMT)
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