Updated April 07, 2025 at 07:40 AM ET
Stock markets around the world tanked on Monday, as investors were gripped with fear about potential economic devastation from President Trump's sweeping tariffs.
In Asia, stock markets closed deep in the red, as investors digested the prospect of a bruising trade war between the world's top two economies. China announced plans for a fulsome retaliation against Trump's tariffs after markets had closed on Friday.
U.S. futures also showed weakness: The S&P 500 and Dow Jones Industrial Average had lost slightly more than 3% ahead of Monday morning's opening on Wall Street. By the end of last week, the Dow Jones Industrial Average had fallen almost 8%, while the Nasdaq Composite had entered a bear market, meaning it was down more than 20% from a recent high.
Here's a look at the latest:
- Hong Kong's benchmark Hang Seng Index slumped 13.2% on the day, its biggest one-day drop since 1997, the year Britain returned the former colony to China, according to Reuters. Taiwan's composite index shed nearly 10% in its biggest one-day drop on record.
- In mainland China, key indexes closed down as much as 9%. Japan's Nikkei index fell close to 8%.
- In early trading in Europe, France's CAC 40 Index, Germany's blue chip DAX index and Britain's FTSE 100 Index were all down 4%-6% in early Monday trading.
- India's stocks saw their biggest single-day drop in percentage terms since March 2020, with the BSE Sensex and Nifty 50 index both dropping about 5% after trading opened before recovering slightly, per the Associated Press.
- Middle East markets also tumbled. The benchmark Brent crude is down by nearly 15% over the last five days of trading, while the Dubai Financial Market exchange fell 5% and the Abu Dhabi Securities Exchange 4% as they opened on Monday.
Critics speak out as recession odds grow
Trump's announcement last Wednesday of a minimum 10% worldwide tariff, as well as higher "reciprocal" tariffs on dozens of countries, has fueled concerns about the likelihood of a recession.
Several major investment banks have cut their forecasts for the economy in recent days, with Goldman Sachs being the latest.
It said in a client note the probability of a recession had risen to 45% from 35%. JP Morgan last week said the risk of a recession had risen above even odds to 60%.
"Investors are very nervous about what's going on," Mark Zandi, chief economist of Moody's Analytics, told NPR on Sunday. "I'm sure they're calling lawmakers and the White House to pressure them to come to some kind of terms with other countries over these tariffs and bring this global trade war to an end, because if they don't soon, the economy is going to go into a recession."
While Wall Street has been largely reluctant to criticize Trump's policies, some high-profile figures are starting to speak out.
On Sunday, Trump supporter and billionaire hedge fund manager Bill Ackman posted a lengthy thread on X characterizing the tariffs — many of which are due to take effect on Wednesday — as "economic nuclear war."
He said the president is "losing the confidence of business leaders around the globe" and urged him to "call a 90-day time out, negotiate and resolve unfair asymmetric tariff deals, and induce trillions of dollars of new investment in our country."
Also over the weekend, White House adviser Elon Musk publicly broke from Trump on the topic of tariffs, saying during a videoconference with Italy's far-right League party that he hopes the U.S. and Europe will move "to a zero-tariff situation, effectively creating a free-trade zone."
Trump doubles down on his forthcoming tariffs
The numbers — and the critiques — don't appear to be deterring Trump.
Commerce Secretary Howard Lutnick told CBS' Face the Nation on Sunday that Trump "wasn't kidding" about the tariffs.
"There is no postponing. They are definitely going to stay in place for days and weeks," said Lutnick. "The president needs to reset global trade. Everybody has a trade surplus and we have a trade deficit."
Speaking to reporters Sunday night on Air Force One, Trump said he had spoken to leaders "from all over the world" but had not agreed to lowering any tariffs.
When asked if there was a threshold of pain from markets that he's unwilling to tolerate, the president sounded dismissive.
"I think your question is so stupid," he said. "I don't want anything to go down, but sometimes you have to take medicine to fix something."
Maria Aspan contributed to this report.
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