Global financial markets and digital currencies experienced significant declines as concerns mounted over escalating tariffs initiated by former President Trump.
These trade policies have ignited fears of a worldwide economic downturn, prompting widespread selling activity among investors.
Sharp Declines Across Global Stock Markets
On Monday, global stock exchanges reacted negatively to Donald Trump‘s reaffirmation of his intention to maintain stringent tariffs.
This stance intensified anxieties about a potential recession.
Consequently, stock prices plummeted, with US stock futures indicating a potential drop of 3-4% at the market opening, and Hong Kong’s Hang Seng index suffering a dramatic decrease of over 10%.
Across Europe and Asia, markets also saw downturns as investors sought safer investments, leading to a decrease in bond yields worldwide.
Recession Fears Rise as Tariffs Face Scrutiny
The investment bank Goldman Sachs has revised the probability of a US recession upwards by 45%, directly linking this increased risk to the financial pressures resulting from President Trump’s newly implemented high tariffs.
While defending his tariff policies, Trump argued that they generate substantial revenue and are essential to rectify trade imbalances with nations such as China and the European Union.
China has already responded to these tariffs with retaliatory measures of its own, imposing tariffs at a rate of 34%.
Trillions Lost in Stocks, Even Supporters Express Concerns
Market instability led to a staggering loss of over $5 trillion in the value of US-listed stocks in just a 48-hour period.
This marked the most tumultuous week for equities since the widespread market disruptions during the 2020 pandemic onset.
Notably, even prominent Trump supporters within the investor community, including Bill Ackman and Stanley Druckenmiller, voiced criticism.
They cautioned that this tariff-driven strategy could be detrimental to both the United States’ global standing and its domestic economic health.
Safe Havens Gain While Crypto and Commodities Suffer
As investors sought refuge from the market turbulence, safe-haven assets like bonds experienced a surge in demand. Conversely, commodities and the cryptocurrency sector were severely impacted.
The cryptocurrency market, in particular, witnessed a sharp correction, with Bitcoin’s price falling to $75,000 and other leading digital currencies recording double-digit percentage losses.
This widespread sell-off suggests a broad movement of investors away from riskier asset classes, including cryptocurrencies, as uncertainties surrounding international trade relations and global economic growth intensify.
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