Stocks tumble ahead of Trump tariffs, Goldman Sachs ups recession concerns
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The news: Global stocks tumbled on Monday ahead of President Donald Trump’s ‘Liberation Day’ tariffs on Wednesday, which will see the US administration impose reciprocal countermeasures on “all countries.”
The numbers: $42 billion was wiped from the ASX on Monday, while Japan’s benchmark Nikkei index plunged 4.05% to end the day at 35,617.56, losing nearly 12% from its December high.
China’s CSI 300 lost 0.71% to close at 3,887.31 while Hong Kong’s Hang Seng Index was down 1.09% in its final hour of trading.
European markets also opened lower. Britain’s FTSE 100 slid 1.4%, while France’s CAC 40 and Germany’s DAX each fell 2%.
Across the pond, S&P 500 futures sank 1.2%, while futures for the Dow Jones Industrial Average dropped 0.7%. Futures for the tech-heavy Nasdaq tumbled 1.6%.
The context: Investors shied away from risky assets on Monday, steering toward safe havens ahead of Trump’s additional wave of tariffs due Wednesday.
US treasuries and gold prices climbed in the face of market turmoil, with bullion reaching an all-time high of USD3,100 ($4,919.07) pushing its monthly gains above 8%.
Goldman Sachs also raised the probability of a US recession from 20% to 35% on Monday, stating that more cuts from the US Federal Reserve are likely as Trump’s tariffs rock the economy and upend financial markets. Goldman projected three cuts (up from two cuts previously forecast) from the US Fed and the European Central Bank each, and lowered its US GDP growth forecast for 2025 to 1.5% from 2.0%.
Earlier on Monday, Trump told reporters on Air Force One that “all countries” can expect to be hit with tariffs when he unveils what he promises to be a far-reaching strategy to remove US trade imbalances.
The US has already imposed tariffs on aluminium, steel and cars, as well as hiking tariffs on all goods being imported from China.
