The global markets continue to experience tariff tremors. US President Trump has not stepped back from imposing tariffs. He announced that if China does not withdraw the 34% tax increase, they will impose an additional 50% tariff on this country on April 9th. Record-level sell-offs occurred in stocks, and cryptocurrencies plummeted. Indexes in the US opened with over a 4% drop. Losses accelerated in oil and natural gas prices. Investors increased their expectations for a rapid rate cut by the Federal Reserve.

Increased concerns about trade wars are causing seismic effects in global markets. US President Donald Trump stated that investors would have to accept the impact of tariffs and that an agreement with China would not be reached until the US resolves its trade deficit issue.

NEW THREAT TO CHINA FROM TRUMP

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

Moreover, all negotiations regarding the requested talks with China will be terminated.”

Trump mentioned that they would immediately start negotiations with all other countries.

China pointed out that the effect of the retaliation against the increased US tariffs was clearly visible in the markets. European Union trade ministers will meet in Luxembourg today to discuss how they will respond to Trump’s tariff package.

Concerns about tension in trade accelerated withdrawals from risky assets. Trump likened the increase in tariffs to medicine, stating, “I don’t want anything to go wrong, but sometimes you have to take medicine to fix something.” On the other hand, there was an increased reaction from the American business community to Trump. Billionaire investor Bill Ackman argued that Trump’s tariff strategy was leading the country into an economic nuclear winter that would be self-inflicted, mentioning that voters did not vote for such a scenario.

US STOCK MARKET PLUNGED

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

RECORD LOSS IN ASIAN STOCKS

In Japan, the Nikkei 225 index closed at 31,187 points, down 7.7%, 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, falling by 7.3%. Hong Kong’s Hang Seng index traded at 19,960 points with a 12.7% drop, and in India, the Sensex index ended at 72,152 points, down 4.3%.

Losses reached 10% in the Australian stock market. The MSCI index tracking other Asia-Pacific markets also fell by 7.68%. The index recorded its sharpest daily decline in 16 years.

MARKET TURMOIL IN EUROPE

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

CRYPTOCURRENCIES CRASHED

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, decreased by approximately 10.58% in 24 hours, dropping to $2.39 trillion.

Bitcoin fell by over 10% in the last 24 hours, dropping below $75,000. The price of Ethereum also decreased by about 22%, falling to $1,421.

OIL AND GAS PRICES HIT THE BOTTOM

In Europe, at the Dutch virtual natural gas trading point TTF, gas prices declined by about 4% to open at 35 euros per megawatt-hour in May futures contracts. Gas prices further dropped by 8% after opening, falling to 33.5 euros. As a result, gas prices in Europe hit their lowest level since May 2024. Brent oil fell to $63, dropping to the lowest level in four years.

EXPECTATIONS FOR RATE CUTS INCREASED

Investors believe that the increased tariffs pose a higher risk of recession and are pricing in a Federal Reserve rate cut starting from May. According to futures trading, five rate cuts of 25 basis points each are expected in the US this year, resulting in reduced returns on Treasury bills and a weakened dollar. Following investors’ shift towards safe-haven assets, the yield on US Treasury bills dropped by 8 basis points to 3.916%.