Stocks around the world nose-dived on Monday, and the S&P 500 was poised to drop again, as President Trump’s trade war makes investors increasingly pessimistic about the economy. Mr. Trump defended his global tariffs, saying they were bringing the United States billions of dollars in revenue.
Asian and European markets extended their sell-off, and Wall Street was bracing for more chaos when trading opened. The S&P 500, which is already 17.4 percent below its February peak, was nearing a bear market, defined as a drop of 20 percent or more from a recent high. The benchmark U.S. index was set to open about 2 percent lower on Monday, according to futures trading.
The rout in global markets reflected deepening concern that Mr. Trump’s significant new taxes on U.S. imports could disrupt global supply chains, cause inflation to accelerate and spark a severe economic downturn. “There’s no sign yet that markets are finding a bottom and beginning to stabilize,” analysts at Deutsche Bank wrote in a note.
Mr. Trump showed no sign of pulling back from his tariffs, saying in a social media post on Monday morning that the Federal Reserve should cut interest rates, a move that the Fed chairman has warned could fuel inflation. Earlier, Mr. Trump had dismissed concerns that his steep new taxes on imports would lead to higher prices, calling them “a very beautiful thing.”
Here’s what else to know:
Asia and Europe: The main stock index in Hong Kong, where many mainland Chinese companies trade, plunged over 12 percent. In Taiwan, a hub for global technology, stocks lost nearly 10 percent of their value. The benchmark pan-European index, the Stoxx Europe 600, was down about 4 percent.
Oil prices: U.S. oil prices briefly dipped below $60 a barrel on Sunday, their lowest level in almost four years, in another sign of concern about a slowing economy. Cheaper oil is generally good for consumers and businesses that use gasoline, diesel and jet fuel. But if prices remain around these levels or fall further, American oil and gas companies are likely to slow drilling, cut spending and lay off workers.
Cryptocurrency: Since Mr. Trump announced his global tariffs last week, the price of Bitcoin has plunged 10 percent, dropping below $78,000 on Sunday night. The decline shows that Bitcoin, often pitched as a stable long-term source of value, is still subject to market gyrations.
Girding for a trade war: China’s leaders, after retaliating against Trump’s tariffs on Friday, said on Sunday that they were prepared for a trade war with the United States, and that China could potentially come out stronger as a result. The commentary highlights how Beijing hopes to project strength while presenting itself as a responsible global power championing fair trade.
Your money: The market turmoil has caused worry for many people, not least those nearing retirement who may need to access funds in the near future. But timing the market on this or any other basis is hazardous, experts say.