On Monday, financial markets saw one of the largest drops in history. This downturn was mostly fueled by investors responding to U.S. President Donald Trump’s tariffs. The risk-off sentiment spurred deep losses all around the major indices, with Japanese markets heading the declines in the Asia-Pacific region.
With this in mind, at the open the benchmark Nikkei 225 had an incredible fall of 8.03%. The more widely-followed Topix index dropped even more, sinking 8.64%. In Hong Kong, futures for the Hang Seng index bottomed out at 22,772. That implies a near 4% fall after the HSI’s most recent close of 22,849.81. The mood continued to be dark and discouraging. U.S. futures particularly plummeted, an acceleration of the bearish sentiment following last Friday’s sharp sell-off in U.S. stocks.
Investors had long wished for the Trump administration to seek lucrative deals and tariff reductions with other nations. Much to the surprise of many, those expectations were quickly shot down when Trump’s chief economic advisers downplayed concerns about both inflation and recession. Specifically, they said that tariffs are here to stay no matter what happens in the market.
The Nasdaq Composite index fared the worst, sinking 5.8% to finish at 15,587.79. This decrease marks a historic loss of 22% from its peak in December. Consequently, the index has now marked its official bear market entry, a label on Wall Street for a sustained drop in the value of an investment.
Adding to the turmoil, U.S. oil prices fell below $60 a barrel on Sunday for the first time in five years. This decline is further fueling investors’ fears over the overall economic outlook. The recent, unprecedented volatility in global markets is a testament to growing fears about destructive trade policies and their destabilizing effects on the economy.