The global markets continue to experience a tariff quake. President Trump of the United States did not back down from customs duties. He announced that if China does not withdraw its 34% tariff increase, they would impose an additional 50% tariff on April 9th. Record levels of selling occurred in stocks, cryptocurrencies plummeted. Stock indexes in the U.S. opened the day with over 4% drops. Losses accelerated in oil and natural gas prices. Expectations of a fast interest rate cut from the Federal Reserve due to investors increased.

In the global markets, there is a tremor effect due to rising concerns about trade wars. President Donald Trump announced that investors need to accept the effects of taxes and that the United States will not reach an agreement with China until the country’s trade deficit problem is resolved.

NEW THREAT FROM TRUMP TO CHINA

Donald Trump threatened China with an additional 50% tariff. Trump stated that “If China does not withdraw its 34% tariff increase for long-standing trade violations by tomorrow, the U.S. will impose an additional 50% tariff on China effective from April 9th.

Additionally, all negotiations regarding requests with China will be terminated.” Trump stated that they would immediately begin negotiations with all other countries.

China stated that the impact of the retaliation they have imposed on the increased tariffs by the U.S. is clearly observed in the markets. European Union trade ministers will meet in Luxembourg today to discuss how to react to Trump’s tariff package.

Concerns about the tension in trade accelerated outflows from risky assets. Trump made a medical analogy regarding the drop in markets, saying, “I don’t want anything to go wrong, but sometimes you need to take medicine to fix something.” On the other hand, there have been increased reactions from the American business community against Trump. Billionaire investor Bill Ackman argued that Trump’s tariff strategy is leading the country to an economic nuclear winter. Ackman stated that voters did not vote for such a scenario.

U.S. STOCK MARKET PLUMMETS

U.S. stock markets started the week with sharp losses. The Dow Jones index opened with a 3.31% drop, Nasdaq with 4%, and the S&P 500 index with a 3.72% decline. After the opening, losses deepened further. The S&P 500 index has dropped by 20% from its recent peak, indicating a bear market signal.

RECORD LOSSES IN ASIAN STOCK MARKETS

In Japan, the Nikkei 225 index closed down 7.7% at 31,187, in South Korea, the Kospi index fell by 5.6% to 2,328, and in China, the Shanghai Composite index dropped by 7.3% to 3,096. In Hong Kong, the Hang Seng index lost 12.7%, trading at 19,960, while in India, the Sensex index declined by 4.3% to 72,152.

Losses reached 10% on the Australian stock market. The MSCI index, which monitors Asia-Pacific stock markets outside Japan, fell by 7.68%. The index recorded its biggest daily drop in 16 years.

EARTHQUAKE IN EUROPEAN STOCK MARKETS

Losses deepened in European stock markets and U.S. futures. The Stoxx Europe 600 benchmark index traded at 465, down 6.4%, followed by a 7.5% drop in the DAX 40 index in Germany to 19,142, and a 4.9% loss in the FTSE 100 index in the UK, trading at 7,658. The FTSE MIB 30 index in Italy dropped by 7.3% to 32,135, the IBEX 35 index in Spain fell by 5.9% to 11,702, and the CAC 40 index in France has experienced a 6.2% depreciation to 6,825 levels. In the U.S., Dow Jones Industrial Index futures fell by 4.3%, S&P 500 by 5%, and Nasdaq 100 by 5.5%.

CRYPTOCURRENCIES CRASHED

Sharp declines were also seen in the most volatile assets in the markets, including cryptocurrencies. According to Coinmarketcap’s data, the value of the global cryptocurrency market, including Bitcoin, decreased by around 10.58% within 24 hours, dropping to $2.39 trillion.

Bitcoin fell by over 10% in the last 24 hours, dropping below $75,000. Ethereum also dropped by about 22%, falling to $1,421.

OIL AND GAS PRICES HIT BOTTOM

At the Netherlands-based TTF, the natural gas trading point in Europe with the most depth, the price of gas per megawatt-hour in May futures contracts opened at 35 euros, approximately 4% lower than the previous close. Gas prices then fell by 8% to 33.5 euros, reaching the lowest level seen in Europe since May 2024. Brent crude oil fell to $63, hitting the lowest level in four years.

EXPECTATIONS OF RATE CUTS RISE

Investors believe that the threat of recession is increasing due to tariffs, and the U.S. Federal Reserve (Fed) will start cutting interest rates from May. According to futures, five rate cuts of 25 basis points each have been priced in for the U.S. this year, causing Treasury yields and the dollar to weaken. Following investors turning to assets seen as a safe haven, the yield on U.S. Treasury bonds fell by 8 basis points to 3.916%.