Trade tremors continue in global markets. US President Trump did not step back from tariffs. He announced that if China does not withdraw its 34 percent tariff increase, they will impose an additional 50 percent tariff on this country on April 9th. Record-level sales were experienced in stocks, and cryptocurrencies plummeted. Indexes in the US opened the day with over 4% declines. Losses hastened in oil and natural gas prices. Investors’ expectations of a rapid interest rate cut from the Fed increased.

In global markets, the earthquake effect is being felt due to escalating concerns over trade wars. US President Donald Trump stated that investors need to accept the effects of tariffs and that the US will not reach an agreement with China until the issue of the US trade deficit is resolved.

NEW THREAT FROM TRUMP TO CHINA

Donald Trump threatened China with an additional 50 percent tariff through a post on his Truth Social account. Trump said, “If China does not withdraw its 34 percent tariff increase on long-standing trade violations by tomorrow, the US will impose an additional 50 percent tariff on China effective April 9th.

Furthermore, all negotiations for talks with China will be terminated.” he added.

Trump mentioned that they will immediately initiate negotiations with all other countries.

China stated that the effect of the retaliatory tariff increase by the US is clearly seen in the markets. EU trade ministers will gather in Luxembourg today to discuss how they will react to Trump’s tariff package.

Concerns about the tension in trade escalated the exits from risky assets. Investors considered reevaluating the tariff increases due to the trillions of dollars in asset price losses and potential economic damage. Trump likened the market downturn to taking medicine, saying, “I don’t want anything to go wrong, but sometimes you need to take medicine to fix something.” On the other hand, the reactions from the American business community to Trump increased. Billionaire investor Bill Ackman argued that Trump’s tariff strategy is leading the country into an economically self-destructive nuclear winter. Ackman noted that voters did not opt for such a scenario.

US STOCK MARKET PLUMMETS

US markets started the week with significant declines. The Dow Jones index opened with a 3.31% drop, Nasdaq with 4%, and S&P 500 with a 3.72% decrease. After the opening, the losses intensified even further. The S&P 500 index fell by 20% from its recent peak, signaling a bear market.

RECORD LOSSES IN ASIAN MARKETS

In Japan, the Nikkei 225 index closed at 31,187 points with a 7.7% decrease, in South Korea, the Kospi index saw a 5.6% drop to 2,328 points, and in China, the Shanghai Composite index fell 7.3% to 3,096 points. The Hang Seng index in Hong Kong dropped by 12.7% to 19,960 points, and in India, the Sensex index traded at 4.3% lower at 72,152 points.

Losses reached 10% in the Australian stock market. The MSCI index, tracking Asia-Pacific markets outside Japan, fell by 7.68%. The index recorded its most severe daily decline in 16 years.

EUROPEAN MARKETS EXPERIENCE TURMOIL

Losses deepened in European markets and US futures contracts. The Stoxx Europe 600 index traded at a 6.4% decline at 465 points, the DAX 40 index in Germany dropped by 7.5% to 19,142 points, and the FTSE 100 index in the UK showed a 4.9% depreciation at 7,658 points. In Italy, the FTSE MIB 30 index closed with a 7.3% drop at 32,135 points, in Spain, the IBEX 35 index fell 5.9% to 11,702 points, and in France, the CAC 40 index showed a 6.2% decline at 6,825 points. In the US, the Dow Jones Industrial Average futures fell by 4.3%, S&P 500 by 5%, and Nasdaq 100 by 5.5%.

CRYPTOCURRENCIES PLUMMET

Cryptocurrencies, the most volatile assets in the markets, also saw sharp declines. According to Coinmarketcap data, the value of the global cryptocurrency market, including Bitcoin, fell by about 10.58% in 24 hours to $2.39 trillion.

Bitcoin dropped by over 10% in the past 24 hours, falling below $75,000. Ethereum also suffered a decline of approximately 22%, dropping to $1,421.

OIL AND GAS PRICES HIT BOTTOM

In Europe, at the Dutch-based virtual natural gas trading point TTF, the price of gas in megawatt-hours for May futures contracts opened at 35 euros, approximately 4% lower than the previous close. Gas prices dropped to 33.5 euros after the opening. Thus, gas prices in Europe fell to their lowest level since May 2024. Brent crude oil fell to $63, reaching its lowest level in 4 years.

EXPECTATIONS OF RATE CUTS INCREASED

Investors priced in that the Federal Reserve (Fed) will cut interest rates starting in May due to tariff concerns escalating recession risks. According to futures, five interest rate cuts of 25 basis points each are priced by the US this year, with Treasury yields and the dollar showing losses. Following investors turning to assets seen as safe havens, US Treasury yields dropped by 8 basis points to 3.916%.