US markets fall as tariffs cause fear of recession

Global markets fell on Monday’s third day as fears continued over the global impact of Donald Trump’s tariffs.

The European market has fallen, with London’s FTSE 100 falling 4.4% to 7,702, reaching its lowest level in over a year. Stocks in Paris and Berlin also fell.

Skittish was the trading of the major US stock market index – after initially falling more than 4%, the stock has been temporarily positive with rumors that the US president is considering suspending the introduction of import taxes.

The White House resumed their downward journey with this “fake news” and the S&P 500, Nasdaq and Dow Jones, although the decline wasn’t too steep.

Last Wednesday, Trump announced tariffs on US trading partners.

In the aftermath, the US and UK stock markets experienced the worst day of fall since the start of the 2020 Covid pandemic.

In early trading on Monday, the S&P 500 decline has been short-lived to more than 20% since it entered the BEAR market territory since its peak in February.

Economists speculated that many countries would try to negotiate deals with the US on tariffs.

But Trump doubled, telling reporters Sunday night that he “sometimes have to take medication to fix something.”

If world leaders cannot agree to terms with Trump, tariffs could have a devastating impact on the economy around the world, analysts warn.

“Essentially, investors are worried about a huge hit (profit) for companies and a massive slowdown in economic growth,” said Russ Mold, investment director at AJ Bell.

On Monday, US investment banking giant Goldman Sachs raised the chances of a US recession from 35% to 45%.

Last week, JP Morgan had a 60% chance that the world’s largest economy could enter a recession after China retaliated against the US with its own tariffs.

In a letter to shareholders Monday, JP Morgan CEO Jamie Dimon said tariffs “will increase inflation and lead to many people thinking it is likely to be a recession.”

He writes: “Whether the tariff menu will cause a recession remains a question, but it will slow growth.”

In the UK, this could mean economic growth will fall by 0.8% this year, and is the economist of KPMG forecasts.

“We’re committed to providing a great opportunity to help you,” said Yael Selfin, Chief Economist at KPMG.

China’s decision to impose a US 34% retaliatory tariff escalated concerns about a trade war between the two countries, continuing to weigh the prices of oil, which fell by more than 4%.

Trump fought back against China’s tariffs on social media and criticized Beijing for “desireing my warning against abuse in order not to retaliate.”

“They’ve made plenty of use of the good old US for decades!” he added.

Meanwhile, copper, an indicator of economic growth, fell more than 7% on Friday due to its widespread use in the industry.

The price of gold, which is usually considered a “safe” investment, also fell slightly.