Ongoing is the tariff earthquake in global markets. President Trump did not back down from customs duties. Record levels of selling occurred in stocks, while cryptocurrencies plummeted. Indexes in the US opened the day with more than a 4% drop. Losses accelerated in oil and natural gas prices. Expectations for a fast interest rate cut from the Fed increased among investors.

The earthquake effect is being felt due to increasing concerns about trade wars in global markets. US President Donald Trump stated that investors need to accept the impacts of taxes and that the US will not reach an agreement with China until the problem of the country’s trade deficit is resolved. China emphasized the market impact of the retaliation against the increased tariffs by the US. Meanwhile, trade ministers of the European Union are meeting in Luxembourg today to discuss how they will react to Trump’s tariff package.

Concerns about the tension in trade accelerated exits from risky assets. Investors were considering reassessing Trump’s tariff increase due to the trillions of dollars in losses in asset prices and the potential damage to the economy. Regarding the market downturn, Trump said, “I do not want anything to go wrong, but sometimes you have to take medicine to fix something.” On the other hand, reactions are mounting from the American business community towards Trump. Billionaire investor Bill Ackman argued that Trump’s tariff strategy is leading the country into an economic nuclear winter that is self-inflicted and noted that voters did not elect such a scenario.

US STOCK MARKET PLUNGED SHARPLY

US stocks began the week with a sharp decline. The Dow Jones index opened with a 3.31% drop, the Nasdaq with 4%, and the S&P 500 index with a 3.72% decline. After the opening, losses intensified further. The S&P 500 index fell 20% from its recent peak, signaling a bear market.

RECORD LOSSES IN ASIAN STOCK MARKETS

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

Losses reached 10% on the Australian stock exchange. The MSCI index, tracking Asia-Pacific stock markets excluding Japan, fell by 7.68%. The index recorded the most significant daily drop in 16 years.

EARTHQUAKE IN EUROPEAN STOCK MARKETS

Losses deepened in European stock markets and US futures. The Stoxx Europe 600 benchmark index is trading at 465 points with a 6.4% decline, while the DAX 40 index in Germany is down by 7.5% at 19,142 points, and the FTSE 100 index in the UK is trading at 7,658 points with a 4.9% loss. In Italy, the FTSE MIB 30 index is down by 7.3% at 32,135 points, in Spain the IBEX 35 index is down by 5.9% at 11,702 points, and in France, the CAC 40 index is down by 6.2% at 6,825 points. In the US, the Dow Jones Industrial Average futures are down by 4.3%, while the S&P 500 is down by 5% and the Nasdaq 100 is down by 5.5%.

CRYPTOCURRENCIES CRASHED

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

Bitcoin dropped by over 10% in the last 24 hours, falling below $75,000. Ethereum’s price also dropped by around 22%, falling to $1,421 levels.

OIL AND GAS PRICES HIT BOTTOM

In Europe, the Netherlands-based virtual natural gas trading hub TTF saw a price drop of about 4% to open at 35 euros per megawatt-hour for May futures contracts. Gas prices dropped by 8% after the opening to 33.5 euros. Thus, gas prices in Europe fell to the lowest level since May 2024. Brent crude oil tumbled to $63, hitting the lowest level in four years.

EXPECTATIONS OF RATE CUTS INCREASED

Investors priced in the increased risk of a recession due to tariffs, expecting the US Federal Reserve to start cutting interest rates from May onwards. According to futures, five interest rate cuts of 25 basis points each are priced in for this year in the US, with Treasury yields and the dollar losing ground. Following investors’ shift towards assets seen as safe havens, the yield of US Treasury bonds dropped by 8 basis points to 3.916%.