Global Stock Markets Experience Significant Losses Amid Trade Tension
Market sell-off results in a loss of $10 trillion over three days, driven by escalating trade tensions between the U.S. and China.
Global stock markets faced considerable declines, culminating in a sell-off that saw nearly $10 trillion in market value evaporate over just three days.
While these losses do not reach the catastrophic levels of the 1987 Black Monday, characterized by a 22.6% drop in the Dow Jones, the recent downturn has raised alarms across major exchanges on both sides of the Atlantic.
Early indicators of the widespread sell-off were evident in Asian markets, with Hong Kong's Hang Seng Index plunging by 13.2%, marking its worst performance since June 5, 1989. Japan's Nikkei 225 fell by 7.8%, reaching an 18-month low, while South Korea's KOSPI experienced a 5.57% decline, the worst since early August 2024. The Chinese markets also faced difficulties, with Shenzhen down 10.8% and Shanghai dropping 7.3%.
These market declines were largely attributed to the intensified trade conflict between Beijing and Washington, exacerbated by ongoing negotiations around the potential acquisition of TikTok by American interests.
In a notable development, President Donald Trump indicated the U.S. trade deficit with China stands at $1 trillion, threatening to withhold any trade deal until the issue is addressed.
This was followed by a statement from Chinese Vice Minister of Commerce Ling Ji, announcing impending reciprocal tariffs of 34% effective April 10. Trump's strong rhetoric on social media suggested additional tariffs of up to 50% could follow if China did not retract its countermeasures, leading to an overall potential tariff impact of 104%.
The turmoil extended to European markets, where at the close of trading, approximately €683 billion was lost, bringing the cumulative losses to €1.924 trillion over the past three days.
Milan's stock exchange, Piazza Affari, saw a decline of 5.18%, with no stock closing in positive territory.
The bond markets also felt pressure, as the spread between Italian BTPs and German Bunds widened from 118 to 131 basis points before settling at 126, while the yield on Italy's ten-year bonds rose from 3.75% to 3.85%.
Similar patterns were observed for Spanish Bonos.
As trading in U.S. markets commenced, volatility was heightened, with the VIX index, known as the "fear index," surging by 130% over the past month.
Pre-market futures indicated a drop of 3% for the Nasdaq and a decrease of 2.7% for both the Dow Jones and S&P 500.
In an attempt to mitigate market fears, Trump urged Americans to remain strong, courageous, and patient.
At approximately 4:15 p.m. EDT, reports surfaced that Trump was considering a 90-day tariff moratorium for all countries except China, leading to a temporary rebound in stock prices.
However, this reversal was short-lived as the White House subsequently denied the report, attributing it to a misunderstanding, which further exacerbated market declines.
The U.S. Federal Reserve convened an emergency meeting to discuss potential interest rate cuts in response to the market conditions.
By the end of the trading day, the Dow Jones closed down by 0.9%, while the S&P 500 decreased by 0.2%, with Nasdaq showing a marginal gain of 0.1%.
Major technology companies exhibited varied performances; Tesla fell by 2.5%, Apple by 3.7%, while Amazon and Meta gained 2.5% and 2.3%, respectively.
Notable dissatisfaction among CEOs of major tech companies, many of whom had aligned with Trump, became evident, as figures like Elon Musk shared critiques of tariff policies on social media.
While these losses do not reach the catastrophic levels of the 1987 Black Monday, characterized by a 22.6% drop in the Dow Jones, the recent downturn has raised alarms across major exchanges on both sides of the Atlantic.
Early indicators of the widespread sell-off were evident in Asian markets, with Hong Kong's Hang Seng Index plunging by 13.2%, marking its worst performance since June 5, 1989. Japan's Nikkei 225 fell by 7.8%, reaching an 18-month low, while South Korea's KOSPI experienced a 5.57% decline, the worst since early August 2024. The Chinese markets also faced difficulties, with Shenzhen down 10.8% and Shanghai dropping 7.3%.
These market declines were largely attributed to the intensified trade conflict between Beijing and Washington, exacerbated by ongoing negotiations around the potential acquisition of TikTok by American interests.
In a notable development, President Donald Trump indicated the U.S. trade deficit with China stands at $1 trillion, threatening to withhold any trade deal until the issue is addressed.
This was followed by a statement from Chinese Vice Minister of Commerce Ling Ji, announcing impending reciprocal tariffs of 34% effective April 10. Trump's strong rhetoric on social media suggested additional tariffs of up to 50% could follow if China did not retract its countermeasures, leading to an overall potential tariff impact of 104%.
The turmoil extended to European markets, where at the close of trading, approximately €683 billion was lost, bringing the cumulative losses to €1.924 trillion over the past three days.
Milan's stock exchange, Piazza Affari, saw a decline of 5.18%, with no stock closing in positive territory.
The bond markets also felt pressure, as the spread between Italian BTPs and German Bunds widened from 118 to 131 basis points before settling at 126, while the yield on Italy's ten-year bonds rose from 3.75% to 3.85%.
Similar patterns were observed for Spanish Bonos.
As trading in U.S. markets commenced, volatility was heightened, with the VIX index, known as the "fear index," surging by 130% over the past month.
Pre-market futures indicated a drop of 3% for the Nasdaq and a decrease of 2.7% for both the Dow Jones and S&P 500.
In an attempt to mitigate market fears, Trump urged Americans to remain strong, courageous, and patient.
At approximately 4:15 p.m. EDT, reports surfaced that Trump was considering a 90-day tariff moratorium for all countries except China, leading to a temporary rebound in stock prices.
However, this reversal was short-lived as the White House subsequently denied the report, attributing it to a misunderstanding, which further exacerbated market declines.
The U.S. Federal Reserve convened an emergency meeting to discuss potential interest rate cuts in response to the market conditions.
By the end of the trading day, the Dow Jones closed down by 0.9%, while the S&P 500 decreased by 0.2%, with Nasdaq showing a marginal gain of 0.1%.
Major technology companies exhibited varied performances; Tesla fell by 2.5%, Apple by 3.7%, while Amazon and Meta gained 2.5% and 2.3%, respectively.
Notable dissatisfaction among CEOs of major tech companies, many of whom had aligned with Trump, became evident, as figures like Elon Musk shared critiques of tariff policies on social media.
Translation:
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Translated by AI
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