A tariff earthquake is ongoing in global markets. President Trump has not retreated from customs duties. Record-level sales were seen in stocks, and cryptocurrencies plummeted. Indexes in the US opened the day with a decline of over 4%. Losses accelerated in oil and natural gas prices. Investor expectations for a rapid interest rate cut from the Fed increased.

The earthquake effect is being felt in global markets due to rising concerns about trade wars. President Donald Trump stated that investors will need to accept the effects of taxes and that an agreement will not be reached with China until the US solves its trade deficit problem. China indicated that the impact of retaliating against the increased US tariffs is clearly visible in the markets. Meanwhile, European Union trade ministers will convene in Luxembourg today to discuss how they will react to Trump’s tariff package.

Increased tensions in trade have accelerated withdrawals from risky assets. Investors thought that Trump would reconsider the increase in customs duties due to the trillions of dollars in asset losses and potential harm to the economy. Trump stated regarding the market’s decline, “I don’t want anything to go wrong, but sometimes you need to take a medicine to fix something.” On the other hand, reactions to Trump from the American business community increased. Billionaire investor Bill Ackman argued that Trump’s tariff strategy was leading the country into an economic nuclear winter. Ackman pointed out that voters did not support such a scenario.

US STOCK MARKET PLUNGES

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

RECORD LOSS IN ASIAN MARKETS

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

Losses in the Australian stock market reached 10%. The MSCI index, which tracks the Asia-Pacific markets excluding Japan, fell by 7.68%, recording the sharpest daily drop in 16 years.

EARTHQUAKE IN EUROPEAN MARKETS

The losses deepened on European stock markets and US futures trading. The Stoxx Europe 600 index traded at 465 points, down by 6.4%, while in Germany, the DAX 40 index had a 7.5% decrease at 19,142 points, and in the UK, the FTSE 100 index was at 7,658 points with a 4.9% loss. In Italy, the FTSE MIB 30 index dropped by 7.3% to 32,135 points, in Spain, the IBEX 35 index decreased by 5.9% to 11,702 points, and in France, the CAC 40 index saw a 6.2% decline to 6,825 points levels. In the US, Dow Jones Industrial Average futures fell by 4.3%, S&P 500 by 5%, and Nasdaq 100 by 5.5%.

CRYPTOCURRENCIES CRASH

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

Bitcoin dropped by more than 10% in the last 24 hours, falling below $75,000. The price of Ethereum also decreased by around 22% to $1,421.

OIL AND GAS PRICES HIT BOTTOM

At the Dutch-based virtual natural gas trading hub TTF, the gas price per megawatt-hour in May futures contracts opened at 35 euros today, down by approximately 4% from the previous close. Gas prices fell by 8% after the opening, dropping to 33.5 euros. Thus, gas prices in Europe hit their lowest level since May 2024. Brent crude oil fell to $63, reaching its lowest level in 4 years.

EXPECTATIONS FOR INTEREST RATE CUTS INCREASE

Investors believe that recession risks have increased due to customs duties and have priced in interest rate cuts by the Federal Reserve (Fed) starting from May. According to futures, investors are pricing in five interest rate cuts of 25 basis points each in the US this year, leading to a decline in Treasury yields and the dollar. Following investors turning to assets seen as safe havens, the yield on US Treasury bonds fell by 8 basis points to 3.916%.