US President Donald Trump insisted he had not intentionally triggered the extraordinary market sell-offs however reaffirmed his objective of eliminating the US commerce deficit. International fairness markets have tumbled since Trump unveiled higher-than-expected reciprocal tariffs final week, wiping out trillions on Wall Avenue. On Friday, China responded with retaliatory tariffs, imposing 34% import levies on all US items, marking a significant escalation within the international commerce struggle.
“I don’t need something to go down, however typically it’s important to take drugs to repair one thing,” Trump stated aboard Air Drive One on the weekend. “We’ve got to resolve our commerce deficit with China,” he continued. “We’ve got a trillion-dollar commerce deficit with China—lots of of billions of {dollars} a yr we lose. Except we remedy that downside, I’m not going to make a deal.”
Trump additionally demanded monetary reparations from Europe: “We put a giant tariff on Europe. They’re coming to the desk; they need to discuss, however there’s no discuss until they pay us some huge cash on a yearly foundation—not only for the current, but additionally for the previous.”
Final week, the President stated he was open to negotiations if different nations supply one thing “phenomenal”.
Asian inventory markets lengthen losses
Equities throughout Asia and US inventory futures prolonged losses throughout Monday’s Asian session, because the escalating international commerce struggle continued to strain investor sentiment.
Hong Kong’s Cling Seng Index plunged practically 10% on the open on the return from a public vacation final Friday, erasing all positive aspects since February. Chinese language equities had rallied strongly earlier within the yr on the again of DeepSeek’s launch of a lower-cost AI mannequin, coupled with Beijing’s pledge for additional stimulus. The Cling Seng Index had risen 24% from the beginning of 2025 to a peak on 19 March, earlier than Trump’s reciprocal tariff announcement. Following the steep sell-off, the index is now up simply 3.2% year-to-date.
Japan’s benchmark Nikkei 225 dropped 6% to an 18-month low in early commerce, triggering a circuit breaker. The index has now declined over 20% from its January highs, coming into bear market territory. South Korea’s Kospi index shed greater than 4%, whereas Australia’s ASX 200 additionally declined by practically 4%. Though the three benchmarks later recovered some floor, they remained in detrimental territory intraday.
“There could possibly be massive rallies this week on constructive headlines. However there will not be a sustainable transfer till Trump signifies he has no intention to boost tariffs additional and is open to negotiating decrease tariffs with buying and selling companions… It is so simple as that, actually,” stated Kyle Rodda, senior market analyst at Capital.com.
US futures drop, prone to ripple via European markets
US inventory futures prolonged their declines, pointing to a sharply decrease open on Monday. As of 4:45 a.m. Central European Time, S&P 500 futures had been down 3.5%, Nasdaq futures slumped 4.5%, and the Dow Jones Industrial Common futures declined 2.9%. In the meantime, the CBOE Volatility Index (VIX), generally known as Wall Avenue’s “concern gauge,” surged 51% final week to above 45—a degree not seen since 2020 and solely briefly touched final August.
The sharp US sell-off is predicted to ripple throughout European markets as EU leaders put together countermeasures in opposition to Trump’s sweeping tariffs. “This morning’s notice goes to be a miserable one. At this level, I’m shortly operating out of adjectives to explain how gloomy sentiment is changing into, and the way grim the financial outlook now seems. Plus, each of these are prone to get significantly worse, earlier than enhancing,” Michale Brown, a senior analysis analyst at Pepperstone London, wrote in a notice.
European indices additionally tumbled final week, with the Euro Stoxx 600 falling 7.4%, Germany’s DAX down 6.9%, and France’s CAC 40 shedding 7.1%.
Traders search haven belongings
Amid the market turmoil, traders turned to conventional safe-haven belongings, sending the euro, Japanese yen, Swiss franc, and authorities bonds larger.
The euro surged in opposition to the US greenback to above 1.10 at one level final week, marking a six-month excessive. The EUR/USD pair stabilised above 1.09 throughout Monday’s Asian session following Friday’s retreat. In the meantime, each the yen and the Swiss franc additionally strengthened to their highest ranges in opposition to the greenback since October 2024.
US authorities bonds rallied sharply as yields plunged, with the 10-year Treasury yield falling under 4% for the primary time since October 2024. In Europe, the yield on Germany’s 10-year bund additionally dropped to a four-month low.
Nonetheless, gold futures declined in early Monday commerce, extending losses from an all-time excessive final week as traders offered the metallic to cowl fairness losses. Regardless of the pullback, analysts count on gold to stay a top-performing haven asset within the present atmosphere.