LONDON: Global stock markets were a sea of red Monday (Mar 31), with the S&P 500 falling into correction territory, ahead of a wave of US tariffs this week that have fuelled recession fears.
Tokyo plunged more than four percent, leading losses across global stock markets as uncertainty over President Donald Trump’s latest tariff announcements due on his “Liberation Day” on Wednesday eroded sentiment.
“There is an air of capitulation in financial markets ahead of the April 2nd reciprocal tariff announcement from the US,” said Kathleen Brooks, research director at XTB.
The S&P 500 fell into correction territory, a drop of at least 10 percent from a recent peak. The S&P 500 set a record high just last month as investors still viewed Trump tariff threats as a negotiating tactic.
But as it has become clear Trump intends to go through with imposing massive tariffs on major US trading partners, concerns about their inflationary impact and the possibility they may trigger a recession have mounted.
Adding to fears, Trump said Sunday that tariffs would apply to “all countries”, not just those with the largest trade imbalances with the United States.
His administration has still not released a detailed plan about who or what will be impacted, however, leading to uncertainty that led to a spike Monday in the CBOE Volatility Index, colloquially known as Wall Street’s “fear gauge”.
“Trump continues to be the key reason why markets are having a bad day,” said AJ Bell investment director Russ Mould.