Global markets are reeling as investor anxiety over President Trump’s tariffs triggers a widespread sell-off. Stocks, oil, and Bitcoin are all feeling the pressure as trade war fears intensify.
On Monday, the Dow Jones Industrial Average plunged 800 points (2.2%), while the S&P 500 and Nasdaq Composite fell 1.7% and 1.4%, respectively, after a brief rally. This continues last week’s trend, where the Dow plummeted 5.5%, and both the S&P 500 and Nasdaq Composite dropped nearly 6% by Friday’s close.
The Nasdaq Composite officially entered bear market territory on Friday. The S&P 500, which hit a record high of 6,144.15 in February, is teetering on the edge of its own bear market, needing only a 158.78-point drop to confirm it.
Amidst the turmoil, gold has bucked the trend, reversing last week’s losses and remaining above $3,000 an ounce. Having reached a record high of $3,139.90 an ounce, gold is being viewed as a safe haven asset amid the uncertainty.
Cryptocurrencies are also taking a hit related to the trade anxieties. Bitcoin fell 3.3%, dropping below $77,000; ether declined 7.5%; solana fell 5.7%; and dogecoin and XRP plunged 8.5% and 11.2%, respectively.
Billionaire investor Bill Ackman has proposed a 90-day “time-out” on Trump tariffs, cautioning against a “self-induced, economic nuclear winter.” Ackman acknowledged Trump’s efforts to address global tariff imbalances but warned that aggressive tariffs could erode confidence in the U.S. as a reliable trading partner.
President Trump defended his tariff policy, claiming the U.S. is generating “billions of dollars a week” from tariffs on “abusing countries”. He also criticized China’s retaliatory 34% tariff increase.
CBS’ Margaret Brennan questioned Commerce Secretary Howard Lutnick about the rationale behind the tariff policies. Brennan even suggested the use of AI and asked about the inclusion of seemingly random countries like the Heard and McDonald Islands in the tariff list.
JPMorgan Chase CEO Jamie Dimon anticipates that President Trump’s tariffs will likely lead to increased inflation, affecting both imported and domestic goods. Dimon also expressed concerns about potential retaliatory actions from other countries and the long-term impact on America’s economic alliances.
The Congressional Budget Office (CBO) forecasts a widening budget deficit, projecting that the national debt will rise from 100% of GDP this year to 156% of GDP in 2055. This increase will be driven by rising costs in mandatory spending programs like Social Security and Medicare, according to the CBO.
Morgan Stanley says S&P 500 could drop another 8%
Israeli Prime Minister Benjamin Netanyahu is scheduled to meet with President Trump at the White House on Monday to discuss the global tariffs. A 17% tariff on goods imported from Israel is slated for April 9, raising concerns about the impact on exports, particularly diamonds and high-tech defense systems.
President Trump maintains he will not back down on tariffs unless other countries agree to equal trade terms. He stated that numerous countries have expressed interest in negotiating.
Treasury Secretary Scott Bessent defended the tariffs as a long-term solution to build economic fundamentals, saying that the years of unfair trading cannot be resolved in days or weeks; the first wave of 10% tariffs went into effect Saturday.
President Trump said Sunday that he would only agree to solve the trillion dollar surplus China has before signing any agreement. Trump claims that the US has over $7 Trillion in committed investments for automotive manufacturing plants, chip companies and other businesses due to the tariffs.
All of this points to a fragile global economy with a lot more downside risk than upside surprise. The last time this much capital fled equities this fast? March 2020.
So, is the 2025 recession already here?
