Asian stock markets saw heavy losses on Monday as fears of a global trade war increased. Japan’s Nikkei index crashed 6%, falling to levels last seen in late 2023. Other Asian markets also faced deep cuts. South Korea’s index fell 5%, Chinese blue-chip stocks dropped 4.4%, and Taiwan’s market tumbled nearly 10% after a two-day break.
The panic came after U.S. President Donald Trump confirmed he would not sign any trade deal with China until America’s trade deficit issues were solved. He also made it clear that he is not concerned about the market crash. China responded to U.S. tariff plans with warnings and strong words, saying the markets have already reacted to their plans.
As a result of this tension, investors worldwide are currently hoping that the U.S. central bank (Federal Reserve) will lower interest rates in the coming days to prevent a slowdown. The futures information reveals that markets are anticipating nearly five cuts in rates during the current year, as early as May. The U.S. 10-year bond yield also fell to 3.91%.
US stock futures plummeted early in the day. S&P 500 futures fell by 3.1%, and those for Nasdaq lost 4%. This follows a massive loss of about $6 trillion in US markets a week ago. European futures were on the weaker side as well, with FTSE falling 2.7%, DAX falling 3.5%, and Euro Stoxx 50 futures falling 3%.
The decline in markets has impacted the prices of commodities as well. Brent crude oil decreased by $1.35 to $64.23 a barrel, and U.S. crude oil decreased to $60.60 a barrel. Even the prices of gold dipped by 0.3% to $3,026 per ounce.
Investors are increasingly concerned that rising tariffs may result in higher costs on products, damaging companies’ profit margins. Large U.S. companies will kick-start their earnings releases from April 11, and analysts believe most companies will eschew providing definitive projections because of uncertainty.
With the world economy already under strain, the ongoing tensions on trade that exist currently between the U.S. and China are exacerbating the situation. Investors are fleeing to safe assets, but those are also coming under pressure now.
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Source: Moneycontrol.
News Desk
