Global stock markets have continued to fall amid fears that a wide-ranging trade war could dent US economic growth and result in a recession. The White House has denied that President Trump’s trade policies are causing lasting chaos. The S&P 500 fell 2.7%, the Dow Jones dropped 2%, and the tech-heavy Nasdaq dropped 4% on Monday.
Investors sold shares in major tech companies like Alphabet, Amazon, Apple, Microsoft, Meta, Nvidia, and Tesla. Tesla’s shares had their worst day since September 2020, falling 15%. In Asia, stocks fell sharply on Tuesday, with Japan’s Nikkei and Taiwan stocks sliding about 3%.
MSCI’s broadest index of Asia-Pacific shares outside Japan fell more than 1%.
Markets plunge amid trade war fears
Chinese stocks, which have been strong performers this year, also fell.
European futures pointed to a lower open as well. President Trump addressed questions about a potential recession, saying, “There is a period of transition because what we’re doing is very big … It takes a little time, but I think it should be great for us.”
Kevin Hassett, the head of the National Economic Council, told CNBC that any uncertainty around Trump’s trade policies would be resolved by early April. He said the policies were “creating jobs in the US” and having the “intended effect of onshoring in the US.”
Over the last week, as the US stock market has slumped, Trump and his administration have been working to allay growing concerns of a recession.
Trump has started a trade war with America’s three largest trading partners, increasing tariffs on China, Mexico, and Canada. The Atlanta Federal Reserve’s GDP Now tracker suggests the economy could contract in the first three months of the year, largely due to the impact of net trade. However, Trump’s commerce secretary, Howard Lutnick, told NBC’s Meet the Press, “There’s going to be no recession in America,” comparing doubts about Trump’s trade policies to previous skepticism over Trump winning the election.
