- Stock Rout Worsens, Bonds Rally on Tariff Turmoil: Markets Wrap
A flight from global equities accelerated Monday and investors piled into haven assets as the fallout from US
President Donald Trump’s tariffs deepened after China announced retaliatory measures. Stocks tumbled from
Sydney to Mumbai, sending a gauge of Asian shares lower by as much as 7.9%, the worst intraday drop in
more than 16 years. Equity-index futures for US and Europe both fell about 3.6%. Oil retreated. Yields on
two-year Treasuries, the most policy sensitive bonds, declined as much as 22 basis points. The dollar was
mixed against major peers, with traditional haven currencies like the yen and Swiss franc outperforming.
Credit-default swaps in Asia blew out by the most since the Covid-19 pandemic in 2020. - Dow drops 2,200 points Friday, S&P 500 loses 10% in 2 days as Trump’s tariff rout deepens
The Dow Jones Industrial Average dropped 2,231.07 points, or 5.5%, to 38,314.86 on Friday, the biggest
decline since June 2020 during the Covid-19 pandemic. This follows a 1,679-point decline on Thursday and
marks the first time ever that it has shed more than 1,500 points on back-to-back days. The S&P
500 nosedived 5.97% to 5,074.08, the biggest decline since March 2020. The benchmark shed 4.84% on
Thursday and is now off more than 17% off its recent high. The Nasdaq Composite, home to many tech
companies that sell to China and manufacture there as well, dropped 5.8%, to 15,587.79. This follows a
nearly 6% drop on Thursday and takes the index down by 22% from its December record, a bear market in
Wall Street terminology. The selling was broad with only 14 members of the S&P 500 higher on the day.
Major market indexes closed at their lows of the session. - Oil plunge deepens on fears global trade war could trigger recession
Oil prices slid more than 3% on Monday, deepening last week’s losses, as escalating trade tensions between
the United States and China stoked fears of a recession that would reduce demand for crude.
Brent futures declined $2.28, or 3.5%, to $63.30 a barrel at 0049 GMT, while U.S. West Texas
Intermediate crude futures lost $2.20, or 3.6%, to $59.79. At the session low, both benchmarks hit their
lowest since April 2021. Oil plunged 7% on Friday as China ramped up tariffs on U.S. goods, escalating a trade
war that has led investors to price in a higher probability of recession. Over the past week, Brent lost 10.9%,
while WTI dropped 10.6%. “The primary driver of the decline is concern that tariffs will weaken
the global economy,” said Satoru Yoshida, a commodity analyst with Rakuten Securities. “Additionally, a
planned production increase by OPEC+ is also contributing to the selling pressure,” he said, adding that
retaliatory tariffs from countries beyond China will be a key factor to watch. Yoshida predicted that WTI could
fall to $55 or even $50 if stock market declines persist. Responding to U.S. President Donald Trump’s tariffs,
China on Friday said it would impose additional levies of 34% on American goods, confirming investor fears
that a full-blown global trade war is under way and that the global economy may be at risk of a recession. - Gold drops to 3-1/2-week low as market sell-off hits bullion
Gold prices fell to a more-than-three-week low on Monday amid a wider market sell-off, continuing
their retreat as investors dumped bullion to cover their losses in other trades on fears of a global recession
due to an escalating global trade war. Spot gold was down 0.3% at $3,027.90 an ounce as of 0331 GMT, after
dropping over 1% earlier in the session to its lowest since March 13. U.S. gold futures rose 0.4% to $3,047.50.
Gold dropped more than 3% on Friday, caught up in the market’s spiral after U.S. President Donald Trump’s
bigger-than-expected tariff measures rippled across global markets. The drop in gold, usually a safe haven
during uncertain times, made dealers speculate that investors might be selling off bullion to realize profits
and potentially cover losses or margin calls on other assets. “There’s a lot of confusion and uncertainties in
the markets about whether there is room for de-escalation ahead, given that tensions are at an extreme right
now, with many still struggling to see any quick resolution for now,” IG market strategist Yeap Jun Rong said.
“While some weakness in prices could be due to profit-taking, resilience still seems to be the broader theme,
with safe-haven flows offering some cushion amid the market volatility.” China on Friday struck back at the
U.S. tariffs imposed by Trump with a slew of counter-measures including extra levies of 34% on all U.S. goods
and export curbs on some rare earth metals. Global recession fears wiped out nearly $6 trillion in value from
U.S. stocks last week and caused Japan’s Nikkei share average to tumble nearly 9% early on Monday. - JPMorgan raises risk of recession in global economy this year to 60%
JPMorgan has raised the probability of a global recession this year to 60%, driven by the economic shock
stemming from a sweeping U.S. tariff hike announced on Liberation Day. The move marks the largest tax
increase on U.S. households and businesses since 1968, and could trigger a significant downturn if fully
implemented, the Wall Street giant warns. The new tariff regime includes a baseline 10% levy on all imports,
with higher rates—up to 20% or more—targeted at countries running trade surpluses with the U.S., notably
China and the European Union (EU). JPMorgan estimates this will lift the average effective tariff rate by 22
percentage points, translating to a $700 billion tax increase, or 2.4% of GDP. “A hike of this size would be on
par with the largest tax hike since WWII,” JPMorgan economists led by Bruce Kasman said. They caution that
the direct economic impact is likely to be amplified by secondary effects, including retaliation from trading
partners, negative shocks to business sentiment, and disruptions in global supply chains. Such blows could
erode household purchasing power and prompt a pullback in spending. “The current positioning of the U.S.
and global expansion points to limited vulnerability that might suggest a relatively mild downturn. But
recessions are inherently unpredictable,” economists wrote. “Another important concern is that sustained
restrictive trade policies and reduced immigration flows may impose lasting supply costs that will lower U.S.
growth over the long run,” they added. The firm’s revised scenario tree sees a 60% likelihood of global
recession, up from 40% previously. The probability of a “Goldilocks” outcome—characterized by balanced
growth and normalized inflation—has been cut to just 10%. - 10-year Treasury yield tumbles below 4% on fear a trade war will tip economy into a recession
U.S. Treasury yields continued to plummet on Friday, with 10-year Treasury yield falling well below 4%, after
China retaliated against President Donald Trump’s aggressive “reciprocal tariff” policy rollout, causing
investors to flood into bonds for safety on fears of a global recession. The 10-year Treasury yield dropped
over 16 basis points to 3.89%, falling to the lowest level since October. The yield had topped 4.8% earlier this
year on hopes that Trump would rev up the U.S. economy with tax cuts. The 2-year Treasury yield shed over
22 basis points to trade at 3.50%. China early Friday said that it would slap a 34% tariff on all U.S. good
starting April 10 following Trump’s blitz earlier in the week that would mean an effective rate on some China
goods of as high as 54%. Investors have flooded into Treasuries for safety over the past few days, pushing
yields lower, after Trump’s tariff rollout was signed into effect on Wednesday evening. The plan, which set a
10% baseline tariff across the board, hit over 180 countries and hammered global markets. The 10-year rate
has tumbled since ending last week at around 4.25% on fears a trade war could raise prices and slow the
economy into a recession. - Bitcoin drops Sunday evening as cryptocurrencies join global market rout
Bitcoin fell below the $78,000 level as investors braced for more financial market volatility after U.S. equites
suffered their worst decline since 2020 on the rollout of President Donald Trump’s restrictive global tariffs.
The price of bitcoin was last lower by 6% at $77,730.03, according to Coin Metrics, after trading above the
$80,000 for most of this year — barring a couple brief blips below it amid recent volatility. It’s off its January
all-time high by 28%. The flagship cryptocurrency usually trades like a big tech stock and is often viewed by
traders as a leading indicator of market sentiment, but last week it bucked the broader market meltdown –
holding between $82,000 and $83,000 and rising to end the week as stocks tumbled and even gold fell.
Other cryptocurrencies suffered bigger losses overnight. Ether and the token tied to Solana tumbled about
12% each. Bitcoin’s down move triggered a wave of long liquidations, as traders betting on an increase in its
price were forced to sell their assets to cover their losses. In the past 24 hours, bitcoin has seen more than
$247 million in long liquidations, according to CoinGlass. Ether saw $217 million in long liquidations in the
same period. - Shares in companies that have large manufacturing operations in Vietnam, including Nike and Lululemon
Athletica., rose Friday after President Donald Trump said Vietnam was willing to eliminate tariffs to avoid
new US levies
Nike shares erased an earlier loss to gain 3%, while Lululemon shares gained 3.1%. Apparel and shoemakers’
shares tumbled Thursday after the president unveiled a 46% levy on the Southeast Asian nation, where
several had shifted manufacturing in recent years after Trump hit China with tariffs during his first term.
Trump said Friday on social media that he’d had a “very productive call” with Vietnamese leader To Lam, who
said the country wants to “cut their tariffs down to zero.” - Tesla Bull Slashes Stock Price Target 43%, Citing Musk and Trump
One of Wall Street’s most bullish Tesla Inc. analysts slashed his price target for the stock by 43%, citing a
brand crisis created by Chief Executive Officer Elon Musk and US President Donald Trump’s trade policies.
“Tesla has essentially become a political symbol globally,” Daniel Ives, a Wedbush Securities analyst who’s
rated the carmaker’s shares a buy for the last four years, wrote in a report to clients Sunday. “It is time for
Musk to step up, read the room, and be a leader in this time of uncertainty.” Ives reduced his Tesla share
price target to $315 from $550, which had been the second-highest among the 72 analysts tracked by
Bloomberg. Ives’ biggest concern is the potential for Tesla to get caught up in backlash against the US
president’s tariff policies in China, where Tesla generated more than a fifth of its revenue last year. President
Xi Jinping’s government plans to impose a 34% tariff on all imports from the US starting April 10, matching
the level of Trump’s so-called reciprocal tariffs on Chinese products. - Technology and financial stocks were among those sliding the most Friday after China retaliated against
new US tariffs with levies on all American imports, escalating a trade war and adding to pressure on risk
assets
Technology companies are reliant on manufacturing, supply and assembly outside the US. Bloomberg
Magnificent 7 Total Return Index fell 5.8%. Hardware manufacturers were notable decliners, with Apple
down 7.3%. Chip stocks fell including Nvidia -7.4%, Micron -12.9%. Software stocks are also pressured, with
Oracle -6.5%, Microsoft -3.6%. Bank stocks extended losses as the intensifying trade war increased
uncertainty about the outlook for the economy. JPMorgan dropped 8.1%, Bank of America -7.6%, Morgan
Stanley -7.5%, Goldman Sachs -7.9%, Citigroup -7.8%. Cryptocurrency-linked stocks also fell as is typical when
traders flee risk, including Coinbase -6%.
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