NEW YORK:Global stock markets tumbled and oil prices fell sharply on Monday after US President Donald Trump refused to back down on his tariffs, fuelling fears of a deepening global economic downturn.
Trading floors across the globe experienced waves of further selling after last week’s sharp losses, with Trump telling Americans to “be strong, courageous, and patient,” minutes before the New York stock market opened to drops of over three percent.
Both the Dow and S&P 500 finished volatile sessions lower while the Nasdaq mustered a modest gain.
Much worse hit was Hong Kong, which collapsed by 13.2 percent in its worst day in nearly three decades.
Trillions of dollars have been wiped off combined stock market valuations in recent sessions.
Taipei stocks suffered their worst fall on record Monday, tanking 9.7 percent.
Tokyo closed down by almost eight percent.
Frankfurt fell as much as 10 percent in early trading before paring back losses to end the day down 4.1 percent.
“The carnage in global equity markets has continued,” said Thomas Mathews, Asia Pacific head of markets at Capital Economics.
A 10 percent “baseline” tariff on imports from around the world took effect Saturday.
A slew of countries will be hit by higher duties from Wednesday, with levies of 34 percent for Chinese goods and 20 percent for EU products.
Beijing last week announced its own 34 percent tariff on US goods, which will come into effect on Thursday.
Trump on Monday threatened to slap an additional 50 percent tariff on China if Beijing did not withdraw its retaliation plans — heightening the prospect of another round of tit-for-tat hikes.
Major US indices briefly surged into positive territory following a report that White House economic adviser Kevin Hassett said Trump was considering a 90-day tariff pause.
But markets retreated when the White House denied the story, posting Hassett’s interview on Fox News that had been misquoted.
Hopes that the US president would rethink his policy in light of the turmoil were dashed on Sunday when he said he would not make a deal with other countries unless trade deficits were solved.
“Sometimes you have to take medicine to fix something,” he said of the market pain that has wiped trillions of dollars off company valuations, which impacts the retirement savings of many Americans.
In a letter to shareholders, JPMorgan Chase CEO Jamie Dimon warned that Trump’s broad tariffs “will likely increase inflation.”
“Whether or not the menu of tariffs causes a recession remains in question, but it will slow down growth,” Dimon said, concluding that “the recent tariffs will likely increase inflation.”
With the start of the first quarter earnings reports, the market is likely to get a flurry of updated outlooks by companies that could further dampen sentiment.
Concerns about future energy demand saw oil prices slide more than two percent, having dropped some seven percent Friday.
Both main contracts hit their lowest levels since 2021, but then cut losses.