Financial markets around the world are in turmoil, with over $6 trillion in value erased in just a matter of days, after U.S. President Donald Trump’s sweeping tariffs triggered widespread panic and fears of a global recession.
The U.S. has imposed tariffs ranging from 10% to 50% on dozens of countries, including allies like Japan, South Korea, and the EU. Trump has defended the tariffs, calling them “medicine” necessary to restore fair trade and reduce the U.S. trade deficit. China responded with 34% tariffs on all U.S. goods and restrictions on exports of critical minerals. The EU and Japan are preparing their own retaliatory measures.
The S&P 500 has plummeted more than 20% from its recent high, signaling a bear market. The Dow Jones dropped by 1,343 points (-3.5%) in early Monday trading, while the Nasdaq tumbled 4.2%. Asian indexes mirrored the plunge, with Hong Kong’s Hang Seng down 13%, Taiwan’s TAIEX falling nearly 10%, and Japan’s Nikkei losing nearly 8%. Europe fared no better, with the FTSE 100 falling 5% and Germany’s DAX dropping 7%.
Major banks are now bracing for a downturn, with JPMorgan estimating a 60% chance of a U.S. recession within 12 months, while Goldman Sachs puts it at 45%.
