By WSJ Staff
Turmoil in global markets snowballed into one of the worst routs in recent memory after President Trump said he will stay the course with aggressive, economically disruptive tariffs.
"What's going to happen to the markets, I can't tell you," Trump said late Sunday. "I don't want anything to go down. But sometimes you have to take medicine to fix something."
Stocks fell early Monday, with contracts tied to the major U.S. indexes falling more than 3%. The pullback tipped the broad S&P 500 index into bear-market territory, following the tech-heavy Nasdaq Composite. That is often defined as following a 20%-plus decline from a recent peak.
Wall Street's "fear gauge," the VIX, leapt as investors braced for further volatility ahead.
Global markets recoiled. In Asia, where many economies are highly trade-reliant, stocks plunged. Hong Kong's main equity benchmark lost 13%, in its worst day since the Asian financial crisis. Indexes in Shanghai, Taipei and Tokyo fell between 7% and 10%.
The selloff didn't spare Europe, where the Stoxx Europe 600 sank more than 4%. Bitcoin and oil prices fell.
Treasurys were volatile, as investors considered if the Federal Reserve will need to slash interest rates. Futures prices showed traders stepping up bets on multiple rate cuts this year. Early Monday, Trump renewed his call for the Fed to ease policy and said his policies were bringing down oil prices and interest rates.
U.S. stocks lost $6.6 trillion in value during a two-day washout last week after President Trump announced larger tariffs than Wall Street expected and China said it would match the duties on all U.S.-made goods.
Here's what else you need to know:
Israeli Prime Minister Benjamin Netanyahu is set to be the first world leader to hold in-person talks with Trump about the tariffs. U.S. officials said more than 50 countries had reached out to start negotiations.
The Chinese Communist Party's flagship newspaper said Chinese policymakers were well-prepared to cope with U.S. tariffs by using policy tools including monetary and fiscal easing.
Influential Wall Street voices raised concerns. JPMorgan's Jamie Dimon warned about the effect of tariffs on growth, prices, and the economic alliances that have underpinned America's "extraordinary standing in world affairs."
Meanwhile, billionaire investor Bill Ackman called for a 90-day pause on the implementation of the tariffs, saying they are a mistake.
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(END) Dow Jones Newswires
April 07, 2025 09:39 ET (13:39 GMT)
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