Markets in Chaos: Tariff Fears and Recession Loom

Global markets plunged as President Trump's tariff announcements intensified recession fears. Investors turned to safe assets like bonds and gold, while stocks tumbled. European leaders prepared counter-tariffs. Economic growth concerns grew, with analysts predicting potential recession due to increased tariffs, affecting inflation and interest rate expectations.

Global markets were thrown into turmoil on Monday following President Trump's declaration that tariffs would affect nearly all countries, inciting fears of a worldwide trade war and potential recession. His comments effectively extinguished hopes that the new tariffs would be restricted in scope.

Investors, seeking refuge from market volatility, flocked to sovereign bonds and the Japanese yen, while also lifting gold prices to record highs. As S&P 500 futures dropped 0.8% and Nasdaq futures fell 1.4%, European indices witnessed similar losses, with futures for EUROSTOXX 50, FTSE, and DAX all declining.

The situation prompted German Chancellor Olaf Scholz to affirm the EU's readiness to counter with tariffs, although reports suggested the bloc might propose concessions to the U.S. Meanwhile, concerns about recession risks grew as analysts foresaw a 35% chance of U.S. economic downturn, driven by aggressive tariff policies and rising core inflation.

(With inputs from agencies.)