Global Markets Reel Amid Intensifying Trade War Jitters

Global markets are unsettled as U.S. President Trump's tariff plans fuel trade war fears, potentially leading to a recession. Investors seek safe assets, and major stock indexes drop, while economists warn of higher recession risks and inflation impacting the U.S. economy.

Global financial markets plummeted on Monday following U.S. President Donald Trump's announcement that tariffs would target all countries, sparking concerns over an impending global trade war and the risk of recession. His comments disrupted hopes for limited levies and set the stage for potential economic turmoil.

Investors scrambled for safe assets, pushing sovereign bonds and the Japanese yen higher, while gold reached record prices. "For the first time in years, risk assets are a concern," commented Ajay Rajadhyaksha from Barclays. Japan's Nikkei led the downturn with a significant drop due to Trump's auto tariff threats.

European and U.S. futures markets mirrored the unease, with key indexes down. Economists highlight the increasing risks of recession as tariffs could slow U.S. growth and enhance inflation. The Federal Reserve's rate decisions and upcoming economic data releases are closely watched as tensions mount.

(With inputs from agencies.)